{"id":607,"date":"2026-07-31T18:05:01","date_gmt":"2026-07-31T10:05:01","guid":{"rendered":"https:\/\/www.btcethdata.com\/?btc_ct_news=new-york-sues-kalshi-over-alleged-illegal-gambling-operation"},"modified":"2026-08-01T05:11:33","modified_gmt":"2026-07-31T21:11:33","slug":"new-york-sues-kalshi-over-alleged-illegal-gambling-operation","status":"publish","type":"btc_ct_news","link":"https:\/\/www.btcethdata.com\/?btc_ct_news=new-york-sues-kalshi-over-alleged-illegal-gambling-operation","title":{"rendered":"New York sues Kalshi over alleged illegal gambling operation"},"content":{"rendered":"

[Update 11:45 UTC, July 31: Adds Kalshi\u2019s response in the sixth and seventh paragraphs.]<\/em><\/p>\n

New York has sued prediction market platform Kalshi, alleging it operates an illegal, unlicensed gambling business by offering event contracts on sports, elections and other outcomes.<\/p>\n

The lawsuit seeks to stop Kalshi\u2019s alleged illegal gambling operation in the state, require the company to forfeit illegal gains, pay restitution to users and pay civil penalties equal to three times those gains.<\/p>\n

\u201cNo matter what they call themselves, prediction markets like Kalshi are gambling platforms, plain and simple,\u201d Attorney General Letitia James said in Friday\u2019s statement<\/a>. \u201cWe are taking them to court to uphold our laws and protect New Yorkers.\u201d<\/p>\n

The lawsuit comes after the New York State Gaming Commission issued<\/a> Kalshi a cease-and-desist order in October 2025, prompting the company to sue the regulator in federal court.\u00a0<\/p>\n

A judge denied Kalshi\u2019s request<\/a> for a preliminary injunction in July, and an appeals court later rejected its bid to block enforcement while the appeal proceeds.<\/p>\n

\u201cIt\u2019s sad to see this type of political theater from the leadership in our own state. States can\u2019t just shut down a federally licensed exchange,\u201d Elisabeth Diana, Kalshi\u2019s head of communications, said in a statement shared with Cointelegraph.<\/p>\n

\u201cThis would also hurt New Yorkers, who would be driven offshore,\u201d she added.<\/p>\n

CFTC defends federal oversight of prediction markets<\/h2>\n

The lawsuit adds to an escalating jurisdictional dispute over whether event contracts offered by federally regulated prediction markets are subject to state gambling laws.<\/p>\n

Just before New York filed its case, the Commodity Futures Trading Commission (CFTC) filed<\/a> an emergency motion seeking to block New York\u2019s enforcement efforts, arguing that the state\u2019s actions interfere with the agency\u2019s exclusive authority under the Commodity Exchange Act to regulate designated contract markets like Kalshi.<\/p>\n

Related: <\/strong><\/em>CFTC issues second warning to prediction markets on cookie-cutter self-certifications<\/strong><\/em><\/a><\/p>\n

The CFTC has taken similar positions in disputes involving at least nine states, arguing that allowing states to prohibit event contracts listed by federally regulated exchanges would create conflicting state rules and undermine federal commodities regulation<\/a>.<\/p>\n

Prediction markets continue to gain mainstream traction<\/h2>\n

Prediction markets allow users to buy and sell contracts tied to the outcome of future events, with prices reflecting the market\u2019s estimate of the probability that an event will occur.<\/p>\n

Kalshi\u2019s rival, Polymarket, has also faced regulatory scrutiny<\/a>, with several countries restricting or investigating its operations over gambling and licensing concerns.<\/p>\n

Kalshi began expanding into blockchain-based infrastructure in December 2025, launching tokenized prediction markets on Solana and later adding support for multiple blockchain networks.<\/p>\n

The broader prediction market sector has also grown alongside major sporting events. <\/p>\n

According to analytics firm Chainalysis, blockchain-based prediction markets processed about $20 billion in trading tied to the 2026 FIFA World Cup<\/a>, with more than 400,000 wallets participating.<\/p>\n

Magazine: <\/strong><\/em>The 100x obsession: Fundamentals grow in importance as crypto matures<\/strong><\/em><\/a><\/p>\n

Related:<\/strong> Bitcoin price<\/a> \u00b7 BTC live chart<\/a> \u00b7 Ethereum price<\/a> \u00b7 ETH gas fee<\/a> \u00b7 Bitcoin price today<\/a> \u00b7 Top 10 cryptocurrencies<\/a><\/p>\n

Source: Cointelegraph<\/a> \/ Yohan Yun<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

The lawsuit adds to a growing clash between New York and the CFTC over whether federally regulated prediction markets are subject to state gambling laws.<\/p>\n","protected":false},"featured_media":608,"template":"","btc_ct_section":[6],"class_list":["post-607","btc_ct_news","type-btc_ct_news","status-publish","has-post-thumbnail","hentry","btc_ct_section-latest-news"],"_links":{"self":[{"href":"https:\/\/www.btcethdata.com\/index.php?rest_route=\/wp\/v2\/btc_ct_news\/607","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.btcethdata.com\/index.php?rest_route=\/wp\/v2\/btc_ct_news"}],"about":[{"href":"https:\/\/www.btcethdata.com\/index.php?rest_route=\/wp\/v2\/types\/btc_ct_news"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.btcethdata.com\/index.php?rest_route=\/wp\/v2\/media\/608"}],"wp:attachment":[{"href":"https:\/\/www.btcethdata.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=607"}],"wp:term":[{"taxonomy":"btc_ct_section","embeddable":true,"href":"https:\/\/www.btcethdata.com\/index.php?rest_route=%2Fwp%2Fv2%2Fbtc_ct_section&post=607"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}