The New York State Gaming Commission has asked a Manhattan court to force Kalshi Inc. and KalshiEX LLC to comply with investigative subpoenas concerning the prediction-market company’s sports-event contracts and operations in the state.
The verified petition, received through the state courts electronic-filing system on Oct. 22, was filed in the Supreme Court of the State of New York, County of New York. The Attorney General’s Office represents the commission in the proceeding.
According to the petition described by RG, the commission is seeking records on sports-event contracts, products offered to New Yorkers under 21, advertising that calls the products wagers or bets, and Kalshi’s ownership and corporate structure. It says the documents are needed to determine whether civil penalties should be pursued for alleged breaches of New York gambling law.
The commission alleges that Kalshi operated a New York enterprise for at least 18 months that enabled wagering on sports and other subjects without obtaining a state sports-wagering licence. New York’s Racing, Pari-Mutuel Wagering and Breeding Law bars entities from offering sports wagering without a Gaming Commission licence, according to the petition.
The subpoenas were issued to both companies on July 31 under Racing Law Section 104(7), with an Aug. 14 return date. The commission says its investigation would be irreparably harmed if Kalshi is allowed to defy the demands. Law360 separately reported that the regulator accused Kalshi of defying the subpoenas.
The subpoena demand followed a federal court’s July 7 denial of KalshiEX’s preliminary-injunction request against the commission. In that ruling, the court found that New York’s gambling laws, as applied to Kalshi’s sports-event contracts, were not preempted by the federal Commodity Exchange Act, and concluded that Kalshi had not clearly shown it was likely to succeed on its preemption argument.
Kalshi has maintained that its event contracts are federally regulated financial products under Commodity Futures Trading Commission oversight rather than products governed by state gambling law. The subpoena proceeding is separate from the federal litigation over which government has authority over prediction markets in New York. The allegations in the subpoena petition have not been tested in court, and RG found no public response from Kalshi to the filing.
