New York's top prosecutor is demanding $36 billion from the prediction market platform Kalshi, claiming the company has been running an illegal gambling operation. The move has already drawn a countermove from a federal regulator, setting up a legal clash over who gets to police these kinds of bets.
The $36 billion demand
The New York Attorney General's office says Kalshi's contracts — which let users wager on outcomes like election results or economic data — amount to gambling under state law. The $36 billion figure represents what the state says is the total value of allegedly illegal transactions processed by the platform. Kalshi has not yet publicly responded to the specific demand, but the company has previously argued that its products are regulated futures contracts, not bets.
CFTC steps in
The Commodity Futures Trading Commission, which oversees derivatives markets, has asked a federal court to stop New York from enforcing its action against Kalshi. The CFTC argues that prediction markets fall under its exclusive jurisdiction, not state gambling laws. The agency's move signals a broader fight over who gets to regulate these relatively new financial products.
A clash of regulators
The dispute pits a state attorney general against a federal agency, each claiming authority over Kalshi's business. New York's action is one of the most aggressive state-level attempts to crack down on prediction markets. The CFTC's intervention suggests it sees the case as a threat to its own regulatory turf. The outcome could set a precedent for how other states treat platforms like Kalshi.
What happens next
A federal judge will now weigh the CFTC's request to block New York's enforcement. Both sides are expected to file briefs in the coming weeks. Until a ruling, Kalshi's operations in New York remain in legal limbo.
