ALBANY, N.Y. (WTEN) — Prediction market giant “Kalshi” is responding after New York State Attorney General Letitia James announced a lawsuit against the company, claiming it’s an “illegal, unlicensed gambling operation.”
“The way that the exchange functions is so different as a business model from a traditional gambling platform,” Kalshi’s Head of Enforcement Robert DeNault said. “The current lawsuit is really a significant overreach.”
Kalshi is similar to Polymarket and lets adults trade on the likelihood of things like sports, politics, news and even weather.
“You’re interacting with a market that operates a lot like the stock market,” DeNault explained.
Kalshi argues that it’s federally licensed and regulated and therefore, states do not have the authority to govern it.
“Kalshi is saying [users] are not really betting, they’re buying a contract,” Tully Rinckey PLLC attorney Greg Rinckey said.
Attorney General James also wants Kalshi to forfeit what she calls “illegal gains” and pay restitution. The state estimates that could cost the platform as much as $36 billion.
“It could have a huge impact on the company,” Rinckey said. “It could even be the end of the company.”
Kalshi is vowing to fight.
“I think the New York Attorney General’s remarks should scare every federally licensed exchange in the State of New York,” DeNault said.
