New York's gaming regulator wants a judge to make Kalshi start answering its questions. The New York State Gaming Commission has asked a Manhattan state court to compel the prediction-market company to comply with investigative subpoenas the commission says it needs to determine whether civil penalties are warranted for alleged violations of state gambling law.
The verified petition, received by the court's filing system on October 22, names Kalshi Inc. and KalshiEX LLC as respondents, according to CDC Gaming. The commission is represented by New York Attorney General Letitia James' office, the outlet reports. Attorney Daniel Wallach posted pages of the petition, bringing early attention to the filing.
The subpoenas themselves are not new. Gambling Insider reports the commission issued them to Kalshi on July 31 under Section 104(7) of New York's Racing, Pari-Mutuel Wagering and Breeding Law, setting a return date of August 14. Months later, the commission says, the company still has not fully complied.
What the Subpoenas Are Looking For
According to CDC Gaming, the records sought cover Kalshi's sports-event contracts, any offerings made to New Yorkers under 21, advertising that describes the company's products as wagers or bets, and details of its ownership and corporate structure. The commission says it needs this material to decide whether to pursue civil penalties and, if so, how large they should be.
The petition alleges Kalshi operated a large New York enterprise designed to let individuals place wagers on sports and other matters for at least 18 months, per the same filing, and claims the company has no gaming commission license to offer sports wagering in the state — something state law requires of any entity offering such wagering. Mobile sports wagering in New York is currently offered only by operators licensed through the commission. The petition's allegations have not been tested in court.
Gambling Insider reports the petition states Kalshi has flatly refused to produce documents responsive to certain requests and that its responses to other requests have been insufficient. The filing reportedly warns that the commission's investigation would be irreparably harmed if Kalshi continues to defy the subpoenas.
A Separate Fight Already Lost in Federal Court
This state court petition follows an earlier defeat for Kalshi in federal court. U.S. District Judge Analisa Torres denied the company's motion for a preliminary injunction against the commission and its officials on July 7, per Gambling Insider's reporting. That federal dispute over how prediction markets should be regulated in New York is separate from the state court action now seeking to enforce the subpoenas.
The federal fight runs both directions. The Commodity Futures Trading Commission sued New York in April in the U.S. District Court for the Southern District of New York, seeking a declaratory judgment that federal law gives it exclusive authority over event contracts and a permanent injunction barring the state from enforcing what it calls preempted state laws against its registrants, according to the Commodity Futures Trading Commission. Kalshi has long argued its event contracts are federally regulated financial products overseen by the CFTC, not products governed by state gambling law.
A Pattern Playing Out Across Several States
New York is far from alone in pushing back on Kalshi. Gambling Industry News reports the CFTC has challenged regulatory activity involving prediction markets in at least nine states, including New York, while Massachusetts, Michigan, Nevada and Washington have separately secured court orders restricting Kalshi's activities. Covers notes Kalshi is also facing litigation from other states, most recently Utah and Connecticut. New York filed a separate suit against rival platform Polymarket in September as part of its broader push against prediction markets, Gambling Insider reports.
As of the latest reporting, no hearing date or ruling on the New York petition had been reported, and Kalshi had not issued a public response, according to RG.org. The outcome could shape how aggressively states can probe prediction-market operators while the CFTC and New York continue arguing over who has the final word on regulating these contracts.
