On Friday, the state of New York filed a lawsuit against Kalshi that seeks an unprecedented minimum of $36 billion stemming from alleged illegal gambling activity. The 32-page legal complaint comes after Kalshi exhausted its legal options in federal court to prevent New York from engaging in enforcement actions against the company.
READ: New York vs. Kalshi (filed on July 31st, 2026)
Citing Kalshi’s recent $22 billion valuation, underage gambling, the Wire Act, numerous penal, racing, and executive laws along with illegal sports betting, New York is asking the State Supreme Court to rule that Kalshi must “pay a penalty of $100,000 for each offering or attempt to offer sports wagering or mobile sports wagering in New York without authorization.”
“Our laws protect New Yorkers from illegal and predatory gambling,” posted New York Governor Kathy Hochul on Friday. “Kalshi chose to ignore them. Now they’re being held accountable.”
CFTC Chairman Mike Selig disagreed with New York’s stance and has vowed to continue the agency’s defense of its “exclusive jurisdiction” claim over prediction markets.
“Rather than seek reasoned answers from the courts, Letitia James and New York seek to force an unprecedented sudden shutdown of prediction markets nationwide,” stated Selig in a post uploaded to his official X account. “The CFTC has already sued to stop this and will continue to defend its jurisdiction.”
In a separate statement provided to CNBC, a Kalshi spokesperson said, “It’s sad to see this type of political theater from the leadership in our own state. States can’t just shut down a federally licensed exchange… We love New York, we love New Yorkers, and New Yorkers love our product.”
Kalshi has filed a motion to have the case removed from state court and into Manhattan federal court. The CFTC filed an emergency motion that seeks a temporary restraining order against New York’s enforcement actions against Kalshi.
A number of industry analysts and legal experts have weighed in on New York’s $36 billion suit against Kalshi, including online gaming and sports betting industry advisor Peter Hammon. In a cross post to X, Hammon’s original LinkedIn observations include insight into New York’s “closed” online sports betting industry, one that has enabled the state to charge a $25 million per-license fee along with a 51% tax rate.
The gaming attorney also expressed his sentiments that states would, at least initially, have an advantage over prediction markets in the states’ pursuit to win legal challenges against platforms that it considers to be illegal gambling hubs. “If your attorney or regulatory advisor didn’t prepare you to stomach that a handful of states would win their initial cases against prediction markets, then you should find new help,” posted Hammon. “I say that as someone who wants PMs to stick around!”
The success that states have enjoyed so far across multiple jurisdictions has been highlighted by Miami Law School professor Daniel Wallach. According to an updated list that the gaming attorney and Forbes contributor posted to X over the weekend, states have “prevailed” in 25 of 31 contested motions related to prediction market cases so far, which represents a success rate that’s currently slightly above 80 percent.
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