New York Attorney General Seeks More Documents from Kalshi

New York State Attorney General Letitia James has taken the legal battle between the state and Kalshi a step further. James filed a petition asking the court for an order requiring the company to produce documents requested under a subpoena dated September 25.

New York argues that Kalshi operates like an unlicensed gambling business and should be regulated by the state. Kalshi counters that its products are not gambling and that they therefore fall under the oversight of the Commodity Futures Trading Commission (CFTC).

In July, a federal judge denied Kalshi's request for a preliminary injunction against state officials. The company appealed, but its request for a stay pending appeal was also denied. The next day, James's office filed a lawsuit in state court, and Kalshi quickly moved the case to federal court. The CFTC, for its part, filed its own lawsuit against New York and obtained an emergency order requiring the state to refrain from enforcement action while allowing Kalshi to continue offering its contracts to New York users.

New York has sued not only Kalshi but also Polymarket. In a lawsuit filed at the end of September, the state alleged that the company offers unlicensed gambling in New York.

Kalshi was required to produce the documents covered by the subpoena by October 5. The subpoena covered records on advertising and influencer marketing, promotional materials, payments, trading activities, internal marketing policies, the company's own trading, agreements with third-party market makers, and volume and liquidity incentive programs. After the deadline passed, Kalshi asked the court on October 30 to quash the subpoena, arguing that the documents relate to issues already being contested in the state's enforcement lawsuit. James's new petition seeks to have the company produce the documents within 10 days if the court issues an order.

The source also reports that New York's casinos earned steady revenue in September, while online sports betting saw a large increase in betting volume.