Kalshi Sues New York Regulator Over Regulatory Overreach
Prediction market accuses state of unconstitutional overreach after cease-and-desist order
Prediction platform Kalshi has filed a lawsuit against the New York State Gaming Commission, claiming the regulator unlawfully overstepped its authority by ordering the company to halt its operations in the state. The dispute centers on whether Kalshi’s “event contracts” constitute sports betting or federally regulated derivatives.
Filed in a Manhattan federal court on Monday, Kalshi’s complaint argues that the New York regulator has no jurisdiction over its platform because it operates under the supervision of the Commodity Futures Trading Commission (CFTC). The company said New York’s cease-and-desist order threatens “imminent civil penalties and fines” for allegedly offering illegal sports betting contracts. Kalshi is seeking a court injunction to block the state’s actions and a ruling affirming that its business falls under federal—not state—oversight.
Kalshi’s platform allows users to trade contracts on the outcome of real-world events, including sports, politics, and business. These “event contracts” have gained popularity in the crypto and prediction markets this year, with similar models offered by blockchain-based competitor Polymarket.
This isn’t Kalshi’s first regulatory battle. The platform has sued state gambling agencies in Nevada, New Jersey, Maryland, and Ohio, and is also defending against allegations from Massachusetts over alleged sports betting violations. Kalshi has already won preliminary injunctions in Nevada and New Jersey, where judges agreed that blocking the platform could cause “irreparable harm.”
New York, however, insists that Kalshi is offering an unlicensed sports wagering platform in violation of state law. The company countered that the state’s order interferes with the federal framework governing derivatives trading and threatens the platform’s existence.
With multiple legal victories already secured, Kalshi’s showdown with New York could set a defining precedent for the future of event-based crypto markets in the United States.
