New York sues prediction market platform Kalshi alleging 'illegal gambling operation'

New York officials sued prediction market platform Kalshi on Friday, calling it an “illegal, unlicensed gambling operation” as the state seeks to halt its operations and force the company to forfeit its profits.

New York joins a growing number of states filing lawsuits against Kalshi and other companies in a dispute with President Donald Trump's administration over who regulates the fast-growing prediction market. Kalshi and other platforms argue they are federally licensed and regulated, and states have no authority to govern them.

“It’s sad to see this type of political theater from the leadership in our own state,” Elisabeth Diana, a spokesperson for New York-based Kalshi, said in a statement. “States can’t just shut down a federally licensed exchange. 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.”

New York Gov. Kathy Hochul and Attorney General Letitia James, both Democrats, announced the lawsuit filed in state Supreme Court in Manhattan.

“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 markets like Kalshi are gambling platforms, plain and simple. By ignoring our laws, Kalshi is running an illegal operation and harming New Yorkers in the process.”

James' office is requesting that Kalshi be ordered to forfeit all illegal gains, pay restitution to consumers who were harmed and pay fines equal to three times the company's gains.

Kalshi had been in negotiations with New York officials in recent weeks over tax and consumer protection issues.

In April, New York filed a similar lawsuit against prediction market platforms Coinbase and Gemini on illegal gambling operation allegations.

State officials say the prediction markets meet the legal definition of gambling “because the outcomes of the events on which its users are betting are uncertain and outside the control of the bettor or hinge on a game of chance.”

New York claims Kalshi has failed to obtain a license from the state Gaming Commission and skirted its obligation to pay taxes like licensed casinos and mobile sports gambling platforms do. The lawsuit also says prediction markets allow users ages 18 to 20, while New York requires mobile sports betting users to be at least 21.

Prediction market platforms say they operate differently than gambling operations, because consumers are trading against other consumers — much like how stock markets work. Prices are based on trading, and the platforms only take a fee from the trading, they say.

The platforms also argue federal law gives the U.S. Commodity Futures Trading Commission exclusive jurisdiction to regulate transactions offered in the prediction market. In February, Trump’s appointee atop the federal commission declared that the agency “will no longer sit idly by” while states aim to regulate or ban prediction markets and “undermine the agency’s exclusive jurisdiction.”

States counter that the vast majority of the business on prediction market platforms is sports betting, which they are empowered to regulate, and that is completely different from the commodities and futures contracts that the commission regulates.

On Monday, a federal judge temporarily blocked Minnesota’s first-in-the-nation law banning prediction markets just days before it was to take effect — dealing a setback for states trying to outlaw or regulate the platforms.

A tangle of lawsuits is growing, as states try to use their gambling laws to shut down Kalshi, Polymarket and other prediction market operators. In April alone, the federal government sued Connecticut, Arizona and Illinois, challenging their efforts to regulate the industry.

FILE - New York Gov. Kathy Hochul speaks following a ribbon cutting ceremony at the new Bills Highmark Stadium in Orchard Park, N.Y., Tuesday, June 23, 2026. (AP Photo/Jeffrey T. Barnes, file)

FILE - Attorney General of New York Letitia James reacts during a Rental Ripoff Hearing at Fordham University on Wednesday, March 11, 2026, in New York. (AP Photo/Andres Kudacki, file)

FILE - An ad for the prediction market app Kalshi is displayed on a mobile phone Thursday, April 16, 2026, in Chicago. (AP Photo/Erin Hooley, file)

LOS ANGELES (AP) — Storm Reid knows how the world sees her: an accomplished, polished actor who always seems to have it all together. Through new music, the Emmy-winner hopes listeners discover another side of her.

Having released her new single “Shotty” on Friday, Reid wants people to meet the less pristine version of herself: a 23-year-old from Atlanta who falls in love, deals with boy problems and is still finding her way.

“I think people might think I have it all together when I really don't,” said Reid, who is known for performances in “ Euphoria, ” “ A Wrinkle in Time ” and “ The Last of Us, ” which earned her an Emmy in 2024. She graduated from the University of Southern California last year.

“I'm a normal girl trying to figure it out,” she continued.

“Shotty” follows Reid’s debut single, “Clean Sweep,” continuing a music journey she has pursued over the past year. So far, she has recorded more than 25 songs.

Reid said she hopes to focus work on her first EP after wrapping production on Teyana Taylor's feature directorial debut “Get Lite,” giving herself time to shape a project that tells a cohesive story. She's releasing music independently through her label, 1720 Music, saying the approach gives her greater creative freedom while leaving the door open to partner with a major label in the future.

“The indie route, you have a little bit more autonomy of what you want to do and how you do things,” she said.

Reid said ownership also gives her an opportunity to create doors for other artists.

“It’s the most powerful thing,” she said. “I want to sign people. I want to sign songwriters and producers and artists, and give them opportunities.”

Music has quickly become as important to Reid as acting, a career she'll continue with upcoming projects including Netflix’s “Roommates” and “Get Lite.” Preparing for Taylor's film pushed Reid outside her comfort zone as a dancer, challenging her to become more comfortable as a performer.

It's a skill Reid hopes will eventually translate to performing her own music.

“It’s as big and as important as acting is,” she said. “It’s something that I want to continue to do and want to continue to grow at.”

Reid said years in Hollywood prepared her for criticism.

“People didn’t feel like I deserved to win an Emmy, but it’s still sitting in my house,” she said. “It’s still in my mama’s house, so I don’t really care what people say.”

Since releasing “Clean Sweep,” Reid said she has largely stayed away from reading online comments.

“I don’t want to get distracted or discouraged,” she said. “Mostly I’ve been so thankful. The sentiments have been really nice and people have been supportive. ... I'm excited and can’t wait for them to hear more.”

For Reid, music has become more about who she's always been.

“Not everything is gonna be perfect. Not everything is gonna be prim, proper and pristine and eloquent,” Reid said. “Like yeah, that’s a part of me, and I can do that, and I can do it really well. But also … this is me too.”

Storm Reid poses for a portrait on Thursday, July 30, 2026, in Los Angeles. (AP Photo/Jae C. Hong)

Storm Reid poses for a portrait on Thursday, July 30, 2026, in Los Angeles. (AP Photo/Jae C. Hong)