Kalshi's Shady Sports Bets: Is It Really Legal?
Kalshi, a prediction market, is under fire. A lawsuit claims it's operating an illegal sports betting platform. The platform refers to bets as "event contracts," but the lawsuit argues they are simply bets—and illegal in many states.
Deceptive Practices Alleged
The lawsuit accuses Kalshi of misleading users. It makes them believe they're betting against other users, but in reality, they're betting against Kalshi itself—similar to a casino. However, Kalshi lacks a gambling license, which is illegal in New York.
Legal Claims vs. Kalshi's Advertising
Kalshi's ads boast, "Legal in 50 states." But the New York State Gaming Commission disagrees. It ordered Kalshi to stop operations, yet the platform continues accepting bets nationwide.
From Prediction Market to Sports Betting
Kalshi began with simple yes-or-no bets, like "Will there be a recession?" It claimed to differ from casinos by charging fees instead of profiting from losses. However, it later expanded into political betting, amassing over $100 million in bets during the October 2024 elections.
In January 2025, Kalshi introduced sports betting, rebranding it as "sports trading." Critics argue it's no different from traditional betting on point spreads or parlays. The lawsuit labels this as illegal gambling, causing financial harm to users.
Plaintiffs Seek Justice
The plaintiffs demand:
- Refunds for their losses.
- Compensation for damages.
- A jury trial to decide Kalshi's fate.
As scrutiny intensifies, questions remain: Is Kalshi a legitimate prediction market—or a disguised betting operation?
