The online prediction marketplace Kalshi is fighting back against the New York State Gaming Commission’s attempts to regulate it like a gambling site.
A federal judge on Tuesday denied Kalshi’s request for a preliminary injunction that would have shielded it from state oversight.
“New York’s gambling laws are designed to protect consumers. Kalshi tried to ignore them,” New York Attorney General Letitia James and Gov. Kathy Hochul said in a joint statement Wednesday. “We will continue to hold all gambling platforms accountable to the law — and that includes prediction markets.”
Kalshi has appealed the judge’s denial. For the moment, Kalshi can continue operating in New York as the case proceeds. A representative for Kalshi did not respond to a request for comment.
Under state law, any company that offers sports gambling must get a license from the Gaming Commission. Kalshi sued the commission in October after regulators sent it a cease-and-desist letter.
Kalshi sells its users short-term contracts that provide payouts if they predict the right answer to a given question, like who will win an election, whether the temperature will hit a certain level on a given day, or what country will win the 2026 World Cup. The odds are set by the activity among traders, rather than the “house” at a casino or sportsbook.
Kalshi argues this makes its contracts substantively different from sports bets. New York regulators argue it's simply gambling by another name.
Prediction marketplaces like Kalshi and Polymarket are facing a multifront battle over who gets to regulate them, and how. In April the federal Commodity Futures Trading Commission sued the state, saying New York officials were improperly infringing on Washington’s exclusive jurisdiction over prediction markets.
The Trump administration has supported the growth of the platforms. Donald Trump Jr., the president’s son, is an adviser to both Kalshi and Polymarket.
That federal case is ongoing.
There are over a dozen states battling Kalshi and Polymarket in court. The Massachusetts attorney general secured a preliminary injunction earlier this year blocking Kalshi from operating in the state. A federal judge in Arizona blocked state regulators from enforcing gambling laws against prediction marketplaces.
