New York sues Kalshi over alleged illegal gambling in prediction markets

New York has filed a lawsuit alongside several other states challenging Kalshi Group Inc. and a number of similar firms over the authority to regulate their trading platforms, a dispute that pits state regulators against the federal government under the Trump administration. The states allege that the companies are operating without proper oversight and seek to assert state-level jurisdiction, while the administration argues that the Commodity Futures Trading Commission (CFTC) holds exclusive authority to supervise such event‑based trading activities.

The litigation adds to a growing series of legal battles over the delineation of regulatory power between state agencies and federal bodies such as the CFTC and the Securities and Exchange Commission. Courts will need to determine whether the contested platforms fall under existing federal frameworks or whether state regulators retain the right to enforce their own standards, a decision that could shape the future of emerging financial markets across the United States.