Kalshi is illegal gambling in New York, state regulators say.
On Oct. 24, 2025, the New York State Gaming Commission sent Kalshi a cease-and-desist letter. The letter demanded that the company stop offering online sports gambling within New York borders.
Kalshi is headquartered in New York City. New York became the sixth state involved in litigation against the nascent but rapidly growing “prediction” gambling platform.
Kalshi, advised by Donald Trump Jr., is worth an estimated $10 billion, according to Bloomberg. In October, the company facilitated around $4 billion in trading volume, with 90% of that coming from sports.
The company, which began offering sports betting in early 2025, says it’s a legal product. Kalshi claims it offers legal “sports event contracts” under the Commodity Futures Trading Commission (CFTC).
Kalshi is Illegal, New York Says
The letter directed Kalshi to “cease and desist immediately from illegally advertising, promoting, administering, managing, or otherwise making available sports wagering and/or a mobile sports wagering platform in New York.”
The NY Gaming Commission warned Kalshi that offering betting “in connection with any sports event” under its gambling laws empowers it to “levy and collect civil penalties and fines for any violation of the Racing Law.”
Listing 20 of Kalshi’s sports betting markets as unlawful, the Gaming Commission demanded that Kalshi shut down its operations.
Kalshi Sues New York in Response
Kalshi did not comply. Following the cease-and-desist letter, Kalshi sued New York.
The company claimed that New York may not enforce its gambling laws against it. Lawyers said the company is a “federally regulated exchange” under the “exclusive oversight of the CFTC and its enabling statute, the Commodity Exchange Act (CEA).”
The lawsuit explained the motivation for the litigation.
“Kalshi has no option but to seek judicial relief. The Gaming Commission’s cease-and-desist letter, sent on a Friday evening, demands that Kalshi immediately cease operating in New York or face criminal and civil liability. Because its platform listed contracts that were to be traded over the weekend, Kalshi has no other practical choice to protect its commercial interests and those of its users except to bring this suit. Absent judicial relief, Kalshi faces the prospect of criminal enforcement and civil penalties in New York as of the date of this filing.”
Why Kalshi is Dangerous in NY
According to the American Gaming Association, Kalshi lacks “fundamental safeguards such as responsible gaming tools and anti-money laundering controls.”
In New York, online sports betting has a legal age of 21. Kalshi allows users 18+.
Kalshi is not accountable to any state regulator or tribal authority, which “should alarm every stakeholder in the sports ecosystem,” the AGA said.
Despite the legal cloud around the company, the NHL partnered with Kalshi and rival Polymarket.
Bottom line: Kalshi is not legal in NY, according to authorities. But a federal court will ultimately weigh in.
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