According to a report by Foresight News, according to an announcement on the website of the New York State Office of the Attorney General, New York Governor Kathy Hochul and Attorney General Letitia James announced that New York State has filed a lawsuit against KalshiEX (Kalshi), accusing it of conducting illegal gambling operations in New York through its prediction market platform. The lawsuit seeks a court order prohibiting Kalshi from operating as an unlicensed gambling business, requiring the company to forfeit all illegal proceeds, provide compensation to affected users, and pay a fine equal to three times its illegal proceeds.

The Office of the State Attorney General’s investigation found that Kalshi’s prediction market is an unlicensed and illegal gambling business, and it allows users under 21 (ages 18–20) to place bets, whereas New York State law sets the minimum age for mobile sports betting at 21.

This lawsuit is the latest step in New York State’s recent series of enforcement actions. Previously, in April 2026, James sued Coinbase and Gemini, alleging that they operated an illegal gambling platform. That same month, Hochul signed an executive order barring state employees from using prediction markets such as Kalshi for insider trading. In January 2026, James also sued game developer Valve, accusing it of promoting gambling to children and teens through popular video games. The New York State Gaming Commission previously required Kalshi to stop operating its unlicensed mobile sports betting platform in October 2025.