- Kalshi is suing the New York State Gaming Commission after receiving a cease-and-desist notice from the state.
- Kalshi argues that their sports markets are legal due to the fact that they vary from traditional sports betting sites.
NEW YORK – Kalshi has filed a lawsuit against the New York State Gaming Commission in response to a cease-and-desist notice from the state of New York.
Why Did New York Issue A Cease-and-Desist?
Kalshi, a public trading market launched in July of 2021, recently got into the sports market as of January 2025. In that time, Kalshi has garnered the attention of multiple states due to perceived loopholes of local legislation.
Maryland, New Jersey, Massachusetts, and multiple other states have already taken legal action against the trading company, arguing that their sports markets have no clear distinction from traditional sports betting.
The issue is not that they are offering sports markets, but the fact that it is being portrayed as a trading market rather than a legal sports betting site, which creates a loophole in which the company does not have to – at least yet – follow state laws such as age requirements and tax laws.
New York is amongst the highest tax rates in the country for sports wagering revenue, imposing a 51% tax on all winnings. If Kalshi is allowed to continue offering sports markets, the state will miss out on countless potential tax dollars.
Kalshi’s Argument
Kalshi believes that they have a legitimate case against the states due to the way that their operations are constructed.
The markets operate similar to stocks, with outcomes increasing or decreasing in price based on the amount of “investment” that they receive from users.
The sports markets that they offer are no different, as users can “invest” in a team to win and have the right to sell their shares at any time.
Who Will Win The Case?
The basis of the case comes down to who is in charge of regulating sporting event contracts.
Kalshi believes that the Commodity Futures Trading Commission (CFTC) has the jurisdiction to decide who can or cannot operate based on location and regulations, while the New York State Gaming Commission maintains that the state holds the legal authority.
As Kalshi continues to grow in popularity, the verdict of this case could have a sizable impact on the future of legal sports betting sites in New York. The defining point is what constitutes a sports betting operation vs a trading market.
