Albany, NY – New York Gov. Kathy Hochul is defending the state’s lawsuit against Kalshi, rejecting criticism that New York is walking away from billions of dollars in potential tax revenue by seeking to shut down the prediction market platform.
Responding Monday to claims circulating on social media, Hochul wrote, “Kalshi can promise 100% of its revenue. You can’t buy yourself an exemption from New York law.”
“If an illegal bookie offers the state a share of their profits, we’ll still shut them down,” the governor added.
The comments came after an online post claimed Hochul had rejected $10 billion in tax revenue over five years by refusing to allow Kalshi to continue operating in New York.
State calls Kalshi an illegal gambling operation
On Monday, Hochul and Attorney General Letitia James announced New York had filed suit against KalshiEX LLC, alleging the company is operating an illegal gambling business through its online prediction market platform.
According to the lawsuit, Kalshi allows users to wager money on the outcomes of sporting events, elections, cultural events and other future occurrences without obtaining a license from the New York State Gaming Commission.
The state argues those prediction markets meet New York’s legal definition of gambling because participants are wagering on uncertain future events outside their control.
“Kalshi has chosen to ignore New York’s gaming laws, which exist to protect consumers, prevent problematic gambling, deliver funding for critical public services, and ensure that every company plays by the same rules,” Hochul said in a statement. “This choice has consequences, and working closely with Attorney General James, New York is taking action to stop this illegal behavior and bring Kalshi into compliance, because no company is above the law.”
Attorney general cites youth gambling concerns
James said the lawsuit is intended to enforce state gambling laws and protect consumers.
“New York’s gambling laws protect children from underage betting and help combat gambling addiction,” James said. “No matter what they call themselves, prediction markets like Kalshi are gambling platforms, plain and simple.”
According to the attorney general, Kalshi allows users between the ages of 18 and 20 to participate, while New York law generally requires individuals to be at least 21 years old for mobile sports betting.
The lawsuit also alleges Kalshi has avoided licensing requirements and taxes that licensed casinos and mobile sportsbooks must pay, depriving the state of revenue used to support public schools, youth sports programs and problem gambling education and treatment.
State seeks fines and restitution
The lawsuit asks the court to prohibit Kalshi from operating in New York, require the company to forfeit what the state characterizes as illegal gains, pay restitution to affected consumers and pay civil penalties equal to three times the profits earned through the alleged violations.
State officials noted that New York previously issued a cease-and-desist order to Kalshi in October 2025, alleging the company was operating an unlicensed mobile sports wagering platform.
The lawsuit is the latest in a series of enforcement actions by the Hochul administration and Attorney General James involving online gambling platforms. Officials also pointed to lawsuits filed earlier this year against Coinbase, Gemini and Valve, along with actions targeting online sweepstakes casinos.
