The state wants an injunction shutting Kalshi’s prediction market down plus triple its New York gains, and the company says only the CFTC can regulate it.
Posted August 3, 2026 at 8:32 am EST.
New York is asking a state judge to shut Kalshi out of the state and make it pay at least $36 billion, and the prediction market in statements to media outlets has answered by calling the case political theater.
Governor Kathy Hochul and Attorney General Letitia James announced the suit against KalshiEX on Friday. The 32-page petition, filed in state Supreme Court in Manhattan, seeks an injunction barring the company from running an unlicensed gambling business, an accounting of customer bets, losses and company gains, plus restitution and civil penalties.
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The headline number is built from two demands stacked together: three times whatever Kalshi made from New York bettors, and $100,000 for every unauthorized or attempted offer of sports wagering. Kalshi’s private valuation has been reported in the tens of billions, which puts the state’s arithmetic in range of the entire company.
Kalshi Says Albany Has No Jurisdiction
“No matter what they call themselves, prediction markets like Kalshi are gambling platforms, plain and simple,” James said in the announcement of the suit.
Kalshi spokesperson Elisabeth Diana rejected that outright. “It’s sad to see this type of political theater from the leadership in our own state,” she said in a statement to several media outlets. “This would also hurt New Yorkers, who would be driven offshore.” The company’s position is that the Commodity Futures Trading Commission regulates it, not Albany, and it had been negotiating with state officials, including over a law that would let New York tax wagers.
Two Specifics the State Is Leaning On
The petition presses two concrete points. Kalshi admits users aged 18 to 20, while New York requires bettors to be 21 for mobile sports wagering, and it lists markets on New York college teams, which licensed sportsbooks in the state cannot offer. James also argues Kalshi has sidestepped the tax that licensed operators pay into public schools and problem-gambling treatment.
Friday’s filing lands after an October cease-and-desist from the New York State Gaming Commission and two federal defeats, on July 7 and again on July 27, when a judge refused Kalshi an injunction pending appeal. The company has done better elsewhere: a Minnesota federal court sided with Kalshi and Polymarket in July against that state’s ban.
Related Listen: DEX in the City: How Kalshi’s Rough Week Became a Federal Fight for Prediction Markets
AI-assisted content: This article was produced with the assistance of AI tools and was reviewed, edited, and fact-checked by a member of the Unchained editorial team before publication.
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