La Jornada: The NY government sues Kalshi “for illegal betting”

New York. New York’s attorney general filed a lawsuit against Kalshi yesterday, alleging that his prediction markets platform violates state laws against illegal gambling.

The lawsuit filed by Attorney General Letitia James adds to a rapidly expanding battle – including an avalanche of lawsuits and countersuits – over whether states or the federal government should regulate the rapidly growing prediction markets industry.

In a lawsuit filed in state court in Manhattan, James argued that Kalshi, founded by Tarek Mansour and Luana Lopes Lara, did not obtain a license from the New York State Gaming Commission to operate its platform, on which users place trades based on the predicted results of sporting events, elections and other events.

Likewise, he added that these types of platforms can promote gambling addiction, even among those under 21 years of age, and endanger people’s financial, emotional and physical health. In April it filed similar lawsuits against two other prediction market operators – Coinbase Financial Markets and Gemini Titan – alleging that the three companies’ so-called “event contracts” constitute “par excellence” a game of chance.

“New York’s gambling laws protect minors from gambling and help combat gambling addiction,” James said in a statement. “Regardless of what they are called, prediction markets like Kalshi are gaming platforms.”

Prediction markets like Kalshi and Polymarket have seen a surge in popularity since the 2024 US presidential election, when they outperformed polls in predicting Republican Donald Trump’s victory over Democrat Kamala Harris (https://t.ly/o-UFz). The U.S. Commodity Futures Trading Commission has claimed exclusive jurisdiction over oversight and challenged regulatory actions in at least nine states, including New York.