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New York sues Kalshi, alleges prediction market is illegal gambling

In this photo illustration, a Kalshi logo is seen displayed on a smartphone on the top of a laptop. (Photo Illustration by Omar Marques/SOPA Images/LightRocket via Getty Images)

(NEW YORK) — New York sued Kalshi on Friday, alleging its prediction market is nothing more than illegal, unlicensed gambling, in large part because outcomes depend more on chance than skill.

The lawsuit does not seek to close down Kalshi, but, if successful, it could dent its ability to operate.

Kalshi insists its event contracts are federally regulated derivatives outside the scope of state gaming laws but New York Attorney General Letitia James’ lawsuit said Kalshi is merely seeking “to avoid the legal and financial consequences of New York’s close regulation of gambling by offering what is quintessentially wagering.”

“It’s sad to see this type of political theater from the leadership in our own state. States can’t just shut down a federally licensed exchange,” Elisabeth Diana, Kalshi’s Head of Communications told ABC News. “This would also hurt New Yorkers, who would be driven offshore. We love New York, we love New Yorkers, and New Yorkers love our product.”

The lawsuit alleged Kalshi violates state laws prohibiting wagering on games involving New York college teams and all sports betting for those under 21.

The Commodity Futures Trading Commission, which has said prediction markets are its exclusive purview, filed for a temporary restraining order to halt the state’s lawsuit.

“New York’s gambling laws protect children from underage betting and help combat gambling addiction,” James said in a statement. “No matter what they call themselves, prediction makers like Kalshi are gambling platforms, plain and simple.”

The lawsuit sought a court order demanding Kalshi submit to state regulators and taxes, to forfeit illegal profits and pay restitution to users nationwide, a possible penalty that could cost Kalshi an estimated $36 billion, according to a statement of facts accompanying the lawsuit.

“Kalshi has chosen to ignore New York’s gambling laws, which exist to protect consumers, prevent problematic gambling, deliver funding for critical public services and ensure that every company plays by the same rules,” Governor Kathy Hochul said.

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Trump has squandered Republicans’ typical advantages in 2 key areas

By CNN
(CNN) — President Donald Trump’s political stature is so poor right now that he has squandered the Republican Party’s advantage on two major issues that almost always favor the GOP: the economy and national security.A Reuters-Ipsos poll this week showed Democrats and Republicans virtually tied on “war, foreign conflicts and terrorism.” The GOP led on that issue by 11 points after the 2024 election. Today, 37% of US adults say Democrats have a better approach, compared to 36% who say the GOP does.Fox News polling a couple weeks back showed something very similar: On national security, 50% of registered voters preferred the GOP, to 48% who preferred the Democratic Party. That’s compared to a 12-point edge for Republicans in January, before the Iran war.Both recent findings are within the margin of error. But the numbers even being that close is basically unheard of.Fox polling has regularly tested how registered voters compare the two parties on terrorism and national security. Until the Iran war, Democrats had never even been within double-digits of the Republican Party on either issue.Republicans have also led consistently on national security in Gallup polling. Democrats only nosed ahead on that issue once in the 21st century: in 2007.Gallup’s data on which party is better on “international terrorism and military threats” has been even more lopsided in the GOP’s favor.Across 22 polls conducted since a year after 9/11, Democrats have led on that issue only once — again, in 2007 — and most of the time Republicans led by double-digits.And then there’s the economy.The most recent Fox survey showed Democrats leading on that issue by nine points, 54%-45%. That was the biggest Democratic advantage since 2006, when they led by 20 points.And when they took a lead on the economy back in April, it marked the first time they were ahead since 2010, shortly after the 2008 financial crisis that began during the George W. Bush administration.CNN polling back in May showed a closer split between the two parties on the economy, with 35% of adults preferring Democrats, compared to 33% who preferred the GOP.The poll previously asked people to choose between congressional Republicans and congressional Democrats. The last time Republicans didn’t lead on that question was 2009.The numbers on both fronts seem to illustrate that Trump greatly miscalculated the fallout from launching the Iran war — as well as other controversial policies like his global tariffs.By launching the tariffs, he effectively took ownership of whatever became of the economic picture. Then he compounded negative public sentiment by basically shrugging off any responsibility to address Americans’ inflation concerns. Now he’s contending with a still-stagnant economic picture, with the economy shedding 23,000 jobs in July.Americans don’t love Democrats; in fact, the blue side remains pretty unpopular in polls. So the fact that they’ve apparently taken a lead on the economy really says something.And the national security numbers might be even more striking — because Democrats hardly ever even compete with Republicans on the topic.Just as education and health care almost always favor Democrats, national security and defending the homeland are almost always signature GOP issues, and lopsidedly so.That remained true even when Bush launched wars in the Middle East that gradually became pretty unpopular.Trump, though, seems to have botched the Iran war so badly that Americans suddenly see Democrats on equal footing with the GOP — in terms of issues on the GOP’s own turf.The-CNN-Wire™ & © 2026 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
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