Kalshi expressed disappointment with the decision by the state, saying that New York can't shut down a federally-licensed financial exchange. New York state sued prediction market platform Kalshi on Friday, alleging that the company is running an "illegal gambling operation." In a case filed in a Manhattan state court, the lawsuit claims that Kalshi accepts wagers as a gambling business in disregard for the state's constitution and laws by not being registered with the New York State Gaming Commission. "No matter what they call themselves, prediction markets like Kalshi are gambling platforms, plain and simple," said New York Attorney General Letitia James in a press release announcing the lawsuit. "By ignoring our laws, Kalshi is running an illegal operation and harming New Yorkers in the process." Governor Kathy Hochul in the press release said the state is taking t…

"It's sad to see this type of political theater from the leadership in our own state," a Kalshi spokesperson said in a statement. "States can't just shut down a federally licensed exchange… We love New York, we love New Yorkers, and New Yorkers love our product." The suit by the state is also seeking a total restitution to users who have placed trades on the platform, a $100,000 penalty for each attempt to offer sports wagering, and another penalty three times the amount the company has gained while allegedly operating in violation of New York law. The state estimates that could total $36 billion. Kalshi originally sued New York state in October after the state's Gaming Commission sent a cease and desist letter to the company. Earlier this month, a judge for the Southern District of New York denied the company's request for a preliminary injunction and temporary restr…