{"id":2638195,"date":"2026-07-31T10:40:02","date_gmt":"2026-07-31T14:40:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/new-york-sues-kalshi-for-running-illegal-gambling-operation\/"},"modified":"2026-07-31T10:42:23","modified_gmt":"2026-07-31T14:42:23","slug":"new-york-sues-kalshi-for-running-illegal-gambling-operation","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/new-york-sues-kalshi-for-running-illegal-gambling-operation\/","title":{"rendered":"New York sues Kalshi for running &#8216;illegal&#8217; gambling operation"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">18<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fnew-york-sues-kalshi-for-running-illegal-gambling-operation%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2638195&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>New York Attorney General Letitia james filed a lawsuit against prediction market platform Kalshi, claiming it is indeed illegally operating as a gambling business in New York, despite being federally regulated. The lawsuit aims to prevent kalshi from offering its contracts in the state, citing violations of local gaming laws by allowing wagering on elections and weather. The legal action seeks a court order to shut down Kalshi&#8217;s operations, impose penalties, and recover profits. Kalshi dismisses the lawsuit as politically motivated, arguing that it cannot be shut down by state authorities due to federal regulation.<\/p>\n<p>This dispute is part of a broader legal debate over whether prediction markets fall under federal oversight as swaps or derivatives,or if thay should be regulated as gambling under state laws. The federal Commodity Futures Trading Commission (CFTC) argues that Congress grants it exclusive authority over prediction markets, and <a href=\"https:\/\/amzn.to\/3YuVZYV\" >recent court rulings reflect mixed outcomes-<\/a>some courts recognize federal regulation, while others have upheld state restrictions. The case highlights ongoing conflicts over jurisdiction, with varying court decisions across different states concerning the legality and regulation of prediction markets.  <\/p>\n<p class=\"readmore\">\n    <button onclick=\"showReadMore()\" id=\"readmorebtn\">Read more&#8230;<\/button>\n<\/p>\n<hr id=\"line\">\n<span id=\"more\"><\/p>\n<article class=\"fn-body\">\n<p class=\"wp-block-paragraph\">New York Attorney General <a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/www.washingtonexaminer.com\/tag\/letitia-james\/\" data-type=\"post_tag\" data-id=\"8955\">Letitia James<\/a> (D) sued prediction market platform Kalshi on Friday, accusing the federally regulated exchange of operating an illegal <a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/www.washingtonexaminer.com\/tag\/gambling\/\" data-type=\"post_tag\" data-id=\"1280\">gambling<\/a> business in the state, escalating a growing legal battle over whether prediction <a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/www.washingtonexaminer.com\/tag\/markets\/\" data-type=\"post_tag\" data-id=\"1824\">markets<\/a> fall under state gambling laws or exclusive federal oversight.<\/p>\n<p class=\"wp-block-paragraph\">The lawsuit seeks to block Kalshi from continuing to offer its contracts in <a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/www.washingtonexaminer.com\/tag\/new-york\/\" data-type=\"post_tag\" data-id=\"61\">New York<\/a>, arguing the company has repeatedly violated state gaming laws by allowing users to wager on everything from <a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/www.washingtonexaminer.com\/news\/washington-secrets\/4657824\/kalshi-shot-pollsters-pundits-midterm-elections-hub\/\">elections<\/a> to the weather.<\/p>\n<section class=\"explore-more-section\" id=\"wex-recommended-widget\">\n<div class=\"magazine-container single\">\n<h1 class=\"magazine-title mt-2\">Recommended Stories<\/h1>\n<p>             <i class=\"fa-solid fa-play icon\"><\/i>         <\/div>\n<div class=\"explore-grid\">\n<div class=\"explore-card\">                         <a href=\"https:\/\/www.washingtonexaminer.com\/news\/justice\/4670589\/new-york-kalshi-lawsuit-gambling-operation-without-permit\/?itm_source=parsely-api\">                             <\/p>\n<div class=\"explore-thumb-wrap\">                                                                                                                                  <\/div>\n<h3>New York sues Kalshi for running gambling operation without a permit<\/h3>\n<p>                         <\/a>                     <\/div>\n<div class=\"explore-card\">                         <a href=\"https:\/\/www.washingtonexaminer.com\/news\/white-house\/4670542\/trump-anti-weaponization-fund-cornyn-rant-blanche\/?itm_source=parsely-api\">                             <\/p>\n<div class=\"explore-thumb-wrap\">                                                                                                                                  <\/div>\n<h3>Trump voices support for anti-weaponization fund in rant against Cornyn<\/h3>\n<p>                         <\/a>                     <\/div>\n<div class=\"explore-card\">                         <a href=\"https:\/\/www.washingtonexaminer.com\/news\/justice\/4669989\/emily-moreno-restraining-order-max-miller-domestic-abuse-allegations\/?itm_source=parsely-api\">                             <\/p>\n<div class=\"explore-thumb-wrap\">                                                                                                                                  <\/div>\n<h3>Emily Moreno files restraining order against ex-husband Rep. Max Miller<\/h3>\n<p>                         <\/a>                     <\/div>\n<\/p><\/div>\n<\/section>\n<p class=\"wp-block-paragraph\">\u201cA temporary injunction is necessary to protect the people of the State of New York from Kalshi\u2019s repeated and persistent illegal practices and to contain the irreparable harm that widely available, illegal mobile gambling poses to problem gamblers and populations susceptible to addiction,\u201d the lawsuit <a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/ag.ny.gov\/sites\/default\/files\/court-filings\/new-york-v-kalshiex-llc-petition-2026.pdf\">states<\/a>.<\/p>\n<div class=\"wex-inarticle-ad wex-inarticle-ad-art-dsk-inart-1\">\n<div class=\"wex-ad-wrap wex-ad-art-dsk-inart-1\" style=\"min-height:90px\"><span class=\"wex-ad-label\" hidden>Advertisement<\/span><\/p>\n<div id=\"div-gpt-ad-3182201-15\" data-wex-ad=\"art-dsk-inart-1\"><\/div>\n<\/div>\n<\/div>\n<div class=\"article-paywall\">\n<h2 id=\"h-what-is-being-alleged\" class=\"wp-block-heading\">What is being alleged? <\/h2>\n<p class=\"wp-block-paragraph\">The attorney general\u2019s office said it is seeking a court order barring Kalshi from operating as an unlicensed gambling business in New York, along with civil penalties, forfeiture of profits, and restitution for users.<\/p>\n<p class=\"wp-block-paragraph\">\u201cKalshi has chosen to ignore New York\u2019s gaming laws, which exist to protect consumers, prevent problematic gambling, deliver funding for critical public services, and ensure that every company plays by the same rules,\u201d Gov. <a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/www.washingtonexaminer.com\/tag\/kathy-hochul\/\" data-type=\"post_tag\" data-id=\"3278\">Kathy Hochul<\/a> (D-NY) said in a <a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/ag.ny.gov\/press-release\/2026\/governor-hochul-and-attorney-general-james-announce-new-york-has-sued-kalshi\">statement<\/a>. \u201cThis choice has consequences, and working closely with Attorney General James, New York is taking action to stop this illegal behavior and bring Kalshi into compliance, because no company is above the law.\u201d<\/p>\n<div class=\"wp-block-image\">\n<figure class=\"alignleft size-large is-resized\">A phone displays crypto trades on Kalshi on Thursday, April 16, 2026, in Portland, Ore. (AP Photo\/Jenny Kane)<\/p>\n<p>&#8221; data-large-file=&#8221;https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/\/2026\/07\/localimages\/AP26106782935927.jpg?w=696&#8243; &#8220;https:><figcaption class=\"wp-element-caption\">A phone displays crypto trades on Kalshi on Thursday, April 16, 2026, in Portland, Oregon. (Jenny Kane\/AP Photo)<\/figcaption><\/figure>\n<\/p><\/div>\n<p class=\"wp-block-paragraph\">Kalshi blasted the <a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/www.washingtonexaminer.com\/tag\/lawsuits\/\" data-type=\"post_tag\" data-id=\"1641\">lawsuit <\/a>as politically motivated.<\/p>\n<div class=\"wex-inarticle-ad wex-inarticle-ad-art-dsk-inart-2\">\n<div class=\"wex-ad-wrap wex-ad-art-dsk-inart-2\" style=\"min-height:90px\"><span class=\"wex-ad-label\" hidden>Advertisement<\/span><\/p>\n<div id=\"div-gpt-ad-3182201-16\" data-wex-ad=\"art-dsk-inart-2\"><\/div>\n<\/div>\n<\/div>\n<p class=\"wp-block-paragraph\">\u201cIt\u2019s sad to see this type of political theater from the leadership in our own state,\u201d a Kalshi spokesperson said. \u201cStates can\u2019t just shut down a federally licensed exchange. This would also just hurt New Yorkers, who would be driven offshore. We love New York, we love New Yorkers, and New Yorkers love our product.\u201d<\/p>\n<p class=\"wp-block-paragraph\">The lawsuit comes just two days after a federal appeals court declined Kalshi\u2019s request to pause a lower court ruling that found New York\u2019s gambling laws could apply to the company despite its federal regulation.<\/p>\n<p class=\"wp-block-paragraph\">Hours later, the Commodity Futures Trading Commission asked the federal judge overseeing the case to block New York from taking enforcement action, arguing that Congress gave the agency exclusive authority over prediction markets.<\/p>\n<div class=\"wex-inarticle-ad wex-inarticle-ad-art-dsk-inart-3\">\n<div class=\"wex-ad-wrap wex-ad-art-dsk-inart-3\" style=\"min-height:90px\"><span class=\"wex-ad-label\" hidden>Advertisement<\/span><\/p>\n<div id=\"div-gpt-ad-3182201-17\" data-wex-ad=\"art-dsk-inart-3\"><\/div>\n<\/div>\n<\/div>\n<p class=\"wp-block-paragraph\">\u201cAltogether, allowing New York to enforce its gambling laws against CFTC-regulated entities has the potential for a single state to bring entire federally regulated markets to the brink of destruction,\u201d the CFTC wrote in a court filing.<\/p>\n<p class=\"wp-block-paragraph\">In April, the agency sued New York after the state attempted to enforce its gambling laws against CFTC-registered exchanges through cease-and-desist letters and civil lawsuits. The regulator is seeking a declaration that federal law preempts state gambling laws in this area, along with a permanent injunction barring New York from taking enforcement action against CFTC registrants.<\/p>\n<p class=\"wp-block-paragraph\">\u201cCFTC-registered exchanges have faced an onslaught of state lawsuits seeking to limit Americans\u2019 access to event contracts and undermine the CFTC\u2019s sole regulatory jurisdiction over prediction markets,\u201d CFTC Chairman Michael Selig <a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/www.cftc.gov\/PressRoom\/PressReleases\/9218-26\">said<\/a>. \u201cAs I\u2019ve said before, the CFTC will not allow overzealous state governments to undermine the agency\u2019s longstanding authority over these markets.\u201d<\/p>\n<div class=\"wex-inarticle-ad wex-inarticle-ad-art-dsk-inart-4\">\n<div class=\"wex-ad-wrap wex-ad-art-dsk-inart-4\" style=\"min-height:90px\"><span class=\"wex-ad-label\" hidden>Advertisement<\/span><\/p>\n<div id=\"div-gpt-ad-3182201-25\" data-wex-ad=\"art-dsk-inart-4\"><\/div>\n<\/div>\n<\/div>\n<h2 id=\"h-federal-vs-state-authority\" class=\"wp-block-heading\">Federal vs. state authority<\/h2>\n<p class=\"wp-block-paragraph\">The dispute is the latest in a wave of litigation over prediction markets, which allow users to buy and sell contracts tied to the outcome of future events, ranging from elections and economic indicators to reality television competitions.<\/p>\n<p class=\"wp-block-paragraph\">At the center of the legal fight is whether those event contracts qualify as \u201cswaps\u201d or other derivatives under the Commodity Exchange Act, placing them under the exclusive jurisdiction of the CFTC, or whether states may regulate them as gambling.<\/p>\n<p class=\"wp-block-paragraph\">Federal law defines swaps broadly as contracts in which parties exchange value based on the outcome of an underlying event, asset, rate, or index. Kalshi argues its event contracts fall squarely within that framework, making them subject solely to federal oversight.<\/p>\n<div class=\"wex-inarticle-ad wex-inarticle-ad-art-dsk-inart-5\">\n<div class=\"wex-ad-wrap wex-ad-art-dsk-inart-5\" style=\"min-height:90px\"><span class=\"wex-ad-label\" hidden>Advertisement<\/span><\/p>\n<div id=\"div-gpt-ad-3182201-26\" data-wex-ad=\"art-dsk-inart-5\"><\/div>\n<\/div>\n<\/div>\n<p class=\"wp-block-paragraph\">New York, along with a<a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/www.washingtonexaminer.com\/news\/4597406\/prediction-market-lawsuits-court-battles\/\"> slew of other states<\/a>, disagrees, contending the contracts amount to illegal gambling under state law regardless of their federal registration.<\/p>\n<h2 id=\"h-conflicting-court-rulings\" class=\"wp-block-heading\">Conflicting court rulings<\/h2>\n<p class=\"wp-block-paragraph\">Meanwhile, courts around the country have reached different conclusions.<\/p>\n<p class=\"wp-block-paragraph\" style=\"text-transform:uppercase\"><strong><a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/www.washingtonexaminer.com\/news\/4597406\/prediction-market-lawsuits-court-battles\/\">Prediction market lawsuits set stage for major court battles<\/a><\/strong><\/p>\n<p class=\"wp-block-paragraph\">Earlier this week, a federal judge in Minnesota <a target=\"_blank\" rel=\"noopener noreferrer\" href=\"https:\/\/www.washingtonexaminer.com\/news\/justice\/4665591\/minnesota-judge-blocks-prediction-market-ban\/\">blocked the state<\/a> from enforcing its gambling laws against Kalshi and Polymarket, concluding the exchanges are federally regulated designated contract markets and that the CFTC has exclusive authority over the transactions at issue.<\/p>\n<p class=\"wp-block-paragraph\">Other states have fared better. Nevada, Michigan, and Washington have successfully halted some or all of Kalshi\u2019s operations through litigation, although the company continues to challenge those rulings.<\/p>\n<\/div>\n<\/article>\n<p><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>NY AG sues Kalshi over illegal gambling in NY<\/p>\n","protected":false},"author":4195,"featured_media":2638196,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/www.washingtonexaminer.com\/wp-content\/uploads\/2026\/05\/AP26106782935927.jpg?w=696","fifu_image_alt":"","footnotes":""},"categories":[33651],"tags":[23297,77287,32142,32120,5270],"class_list":["post-2638195","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-western-journal","tag-gambling","tag-kalshi","tag-legal-action","tag-new-york","tag-regulation"],"fifu_image_url":"https:\/\/www.washingtonexaminer.com\/wp-content\/uploads\/2026\/05\/AP26106782935927.jpg?w=696","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2638195","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/4195"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2638195"}],"version-history":[{"count":3,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2638195\/revisions"}],"predecessor-version":[{"id":2638199,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2638195\/revisions\/2638199"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2638196"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2638195"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2638195"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2638195"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}