New York Attorney General Letitia James filed a petition Friday seeking at least $36 billion from Kalshi, asking a state court to shut down the prediction market platform and strip it of three times its alleged gains. The move escalates a federal-state collision over who regulates event contracts, with the Commodity Futures Trading Commission having sought a restraining order against New York's enforcement just a day earlier.
The numbers and the charges
The petition puts the damages figure at a minimum pending a full accounting, with the $36 billion representing treble damages under New York law. James brings eight counts ranging from the state constitution's gambling ban to bookmaking, possession of gambling records, unlicensed mobile sports wagering and the federal Wire Act. The state also wants $100,000 for every offer of sports wagering, plus restitution and disgorgement. Investigators placed test bets including four contracts on Connecticut to beat Michigan in April for $1.14 including fees. The petition says Kalshi lets 18-year-olds open accounts where New York sets the floor at 21, and offers markets on games involving New York college teams, which even licensed operators are barred from touching.
Kalshi's own figures
The petition quotes Kalshi's own numbers back at it: a $22 billion valuation and $178 billion in annualized trading volume. Those figures make the $36 billion demand look less like a negotiation and more like an attempt to bankrupt the platform. James sued Coinbase and Gemini in April on a similar theory, suggesting a broader campaign against crypto-adjacent prediction markets.
The federal counter-move
The CFTC moved first in April, suing New York to establish that federal law gives it sole authority over event contracts. On Thursday it asked the court in that case for a restraining order barring the state from bringing criminal or civil enforcement against Kalshi or any other CFTC-registered platform. New York filed the next day regardless. The Trump administration has backed the agency directly, with the president calling state officials who oppose prediction markets "SCUM." The CFTC has also sued Illinois, Arizona and Connecticut over their attempts to police event contracts, added Wisconsin, and moved against Minnesota within hours of its ban becoming law.
The scorecard so far
Kalshi has mostly been losing in court. It sued the New York State Gaming Commission in the Southern District last October, was denied a preliminary injunction on July 7 and refused protection pending appeal on July 27. A Michigan judge restrained it in June, and King County Superior Court granted Washington a preliminary injunction on July 20. Its two real wins are the Third Circuit, which upheld an injunction against New Jersey in April, and Minnesota, where a federal judge blocked the state's ban on July 27. That ruling turned on whether event contracts count as swaps under the Commodity Exchange Act. Judge Katherine Menendez found many do, and singled out sports and pop-culture markets as the doubtful cases. New York's petition is aimed almost entirely at sports.
What to watch
The collision is now set: a federal regulator claiming exclusive jurisdiction versus a state treating the same product as illegal gambling. Minnesota's carve-out for sports markets gives New York a template, but the CFTC's restraining order request, if granted, would freeze state enforcement nationwide. The next move belongs to the courts, and the timeline is measured in days.