New York is suing prediction market Kalshi, calling it an illegal gambling operation

[DragonSlayer101]

Cutting corners: New York Attorney General Letitia James has sued prediction market platform Kalshi, alleging that it violates state gambling laws. The lawsuit, filed in the New York Supreme Court in Manhattan, claims the company runs an "illegal, unlicensed gambling operation" covering sports, culture, elections, and other events.

In a statement, James said Kalshi violates New York's anti-gambling laws, which are designed to protect minors from betting and combat gambling addiction in adults. "No matter what they call themselves, prediction markets like Kalshi are gambling platforms, plain and simple," she said, adding that Kalshi's actions are harming the most vulnerable New Yorkers.

The lawsuit asks the court to order Kalshi to forfeit all profits and pay restitution to New Yorkers who lost money on the platform. It also seeks fines equal to three times the company's gains. In total, the fines and damages New York is seeking amount to around $36 billion.

The lawsuit alleges that Kalshi is operating without a valid license from New York's Gaming Commission and has not paid state taxes, unlike licensed casinos and mobile sports gambling platforms. It also notes that Kalshi allows users as young as 18 to place wagers, while New York law requires bettors to be 21 or older to participate in mobile sports betting.

Talking to reporters, state officials argued that Kalshi's operations meet the textbook legal definition of gambling because "the outcomes of the events on which its users are betting are uncertain and outside the control of the bettor or hinge on a game of chance."

Kalshi has predictably rejected the allegations, calling the lawsuit little more than "political theater." In a statement, company spokesperson Elisabeth Diana argued that Kalshi's operations are regulated by federal law, and that states don't have the power to shut down a federally licensed exchange.

Diana also warned that shutting down Kalshi, which employs an estimated 125 to 150 people at its New York City headquarters, would end up hurting New Yorkers, since users would be pushed toward unregulated, offshore platforms instead. "We love New York, we love New Yorkers, and New Yorkers love our product," she added.

But New York is not the first state to sue Kalshi over illegal gambling and racketeering allegations.

At least 13 states, including Kentucky, Tennessee, Ohio, Wisconsin, Nevada, and Washington, have taken Kalshi and rival platforms like Polymarket to court over illegal gambling, tax evasion, underage betting, unfair competition, and other charges.

Masthead credit: ESPN

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New York is suing prediction market Kalshi, calling it an illegal gambling operation

 

[yRaz]

But day trading on robinhood is fine, though. I've been trading as a hobby for almost 2 decades now. Even if I do my due diligence and research things to put stock trades in my favor as much as possible, I still know it's gambling. It's why I don't touch my ROTH or 401k. If you adjust my trading account for inflation, I've only made about 10k over 20 years.

But here is the thing, if you remove the magnificent 7 stocks from the dow, the market hasn't really gone up. The old slow and steady wins the race thing has t been true since covid and it's almost universal amount the zoomers I see coming into the workforce don't believe the will retire and they don't believe saving money works. I partially agree with that because the stuff we need to survive every day, like food, water and shelter, is vastly out pacing inflation. So some of these platforms show some real appeal. if a days wage is going to be less this month than it is next month then why not "put it all on black"

And these states are all going to want their chunk of change.

 

[m4a4]

Translation: We want a cut of that money that flows through you, because taxes haven't been enough.

 

[yRaz]

Translation: We want a cut of that money that flows through you, because taxes haven't been enough.

It's never enough. The more they collect the more they spend. It's human nature. I've saved the equivalent of a second job over the course of my life time by shopping smarter and financing as little as possible. The only thing I'm currently financing is my house. The world needs a population in debt inorder to function. And I would just like to point out that credit as we know it in the modern world is a relatively new idea.

 

[pnntmp]

I feel somewhat weird to agree with something coming from New York, but what you do on Kalshi and Polymarket is most definitely gambling. I mean practically, legal technicalities aside.

The request to pay restitution to New Yorkers who lost money on the platform is almost as stupid as is the gambling itself. Gambling is called 'tax on stupidity' for a reason. Being stupid should be painful, that's in the best interest of the society as a whole, and especially of the people who tend to do stupid things often.

 

[RudyBob]

Letitia James...As crooked as they come

 

[dioholydiver]

Translation: We want a cut of that money that flows through you, because taxes haven't been enough.

Exactly

 

[Jarenien]

Anyone that uses either of these is a m0ron, plain and simple.