New York gaming regulator sues Kalshi over subpoena compliance

The New York State Gaming Commission has filed a petition in Manhattan asking a court to order Kalshi to comply with subpoenas the regulator says the prediction markets operator has largely ignored since the summer.

The filing, lodged in New York County Supreme Court on 22 October, follows subpoenas the commission issued on 31 July with an August 14 deadline for responses, according to SBC Americas.

Those subpoenas, issued under the state's racing, pari-mutuel wagering and breeding statute, sought material on four fronts: marketing language that describes Kalshi's products as bets or wagers, access given to users under 21, the structure of its sports event contracts, and the company's ownership.

The commission wants to use the records to decide whether Kalshi has broken state gambling law and, if so, what civil penalties might follow.

Kalshi has countered throughout that its contracts are financial instruments regulated at federal level by the Commodity Futures Trading Commission, not gambling products subject to New York oversight.

The petition states that Kalshi "has flatly refused to produce any documents in response to Requests one through five or ten through twelve, which are undeniably relevant to the Gaming Commission's investigation into Kalshi's mobile sports wagering operations in New York," and says other responses fell short of what was required.

On the question of underage users, the commission says Kalshi objected on the basis that such requests "presuppose a gaming-age framework inapplicable to a CFTC-regulated exchange."

Kalshi also pushed back on handing over ownership and capitalisation data, calling it "confidential and competitively sensitive investor and capitalization information" that would expose investors not party to the case.

The commission rejects that reasoning, arguing that ownership records could help it trace responsibility for any violations and point toward other entities or individuals worth investigating.

Its petition states plainly that it is seeking the material "so it can determine whether to issue civil penalties against Kalshi and others for violations of the Racing Law and, if so, in what amounts."

The regulator is asking the court to order Kalshi to answer the outstanding requests and hand over all non-privileged responsive documents within ten days of any ruling.

SBC Americas reported that it contacted Kalshi for comment on the commission's claims but had not received a reply by publication.

Separately, the commission alleges Kalshi has run sports-related operations in New York for at least 18 months without the licence state law requires, though that claim is disputed and the subpoena petition itself does not resolve it. The current filing seeks only document production, not a ruling on penalties.

The commission frames Kalshi's resistance as defiance of prior rulings, stating that "despite multiple court rulings declining to enjoin the Gaming Commission from enforcing the Racing Law, Kalshi nonetheless refuses to comply with key Subpoena requests necessary to assess the scope of Kalshi's operations in New York."

Those earlier rulings include a decision by the U.S. District Court for the Southern District of New York denying Kalshi's bid for a preliminary injunction against state enforcement of cease-and-desist orders the commission sent in October 2025, after which Kalshi sued the state.

New York Attorney General Letitia James, whose office represents the gaming commission, had already sued Kalshi in July seeking $36 billion over what her office called an unlicensed gambling operation.

The subpoena dispute runs alongside a wider jurisdictional battle over sports event contracts involving multiple states and federal agencies, including an April lawsuit the CFTC filed against New York, a fight that observers expect could ultimately reach the U.S. Supreme Court.