New York Takes Kalshi to Court, Kalshi Sues Louisiana

The New York State Gaming Commission has asked the New York State Supreme Court to compel Kalshi, the prediction market company, to respond to subpoenas issued on July 31. The commission is seeking documents about sports event contracts, services offered to users under 21, and advertising that promotes the products as betting. According to the commission's evidence, Kalshi allowed New Yorkers to place bets for at least 18 months without a commission license. The state estimates the total potential penalties at no less than $36 billion. That figure is above Kalshi's reported $22 billion valuation.

The same day, Kalshi filed suit in the U.S. District Court for the Western District of Louisiana against Louisiana Attorney General Liz Murrill, Gaming Control Board Chairman Christopher Hebert, and the gaming enforcement unit under the state police. The company argues that the state's intent to treat its sports event contracts as illegal gambling violates the Supremacy Clause of the Constitution. The lawsuit is based on two laws signed in May that took effect on August 1. One of them places online gambling under organized crime statutes and provides for prison sentences of up to 50 years.

In New York, Kalshi's request for a preliminary injunction was denied on May 18, and an appeal is ongoing, which shapes the course of the case. The commission expects Kalshi to deliver the documents by August 14, 2026. Kalshi, for its part, says it has not provided any documents in response to eight of the requests and that its responses to the other four are inadequate.