Kalshi facing federal lawsuit for unlawful sports gambling activities
The plaintiff, Daniel Yee, has sued the operator for his losses, alongside the losses of others.
Key Points
- Kalshi has been sued at federal level by one of its players over $2,000 in losses
- Daniel Yee alleges that Kalshi’s advertising represents wagering via the platform as legal in all states
- Subsequently, he is now encouraging others to file additional suits against the operator for misrepresenting its services and offering unregulated gambling
Prediction market operator Kalshi has been sued by one of its former players for the losses of all persons to have utilized the platform in the US.
Fascinatingly, plaintiff Daniel Yee is seeking a federal injunction to recover the losses of all players who have wagered (and lost) on the Kalshi platform, both across the entire United States – and within the states of New York and California.
Yee’s suit alleges that Kalshi is purporting its prediction market offerings as legalized and regulated sports betting, leading to himself and likely millions of others wagering via the platform – thinking they were engaging in a licensed practice. However, Yee’s suit further states that Kalshi’s offerings are neither legal, nor regulated, within the realms of sports betting – and is enacting a 1710 legal course which allows a given losing party to sue a given winning party for the value of losses.
Indeed, this law is active in both the state of New York, where Kalshi is licensed – and in the state of California, where Lee is a registered citizen. It is stated as part of the suit that Kalshi continuously represented its services as legal in California. Yee argues that had he been aware that he was engaging with unregulated gambling, he would not have interacted with the site – as he first became aware of Kalshi following the 2024 presidential election.
Despite only losing $2,000 on Kalshi, Yee’s suit opens the operator up to litigation from many others and represents the first federal suit against any prediction market operator.
Good to know: This week Kalshi also appealed against the Maryland District Court’s rejection of its preliminary injunctive relief as part of an additional lawsuit against the state’s regulator
Evidently, there are plenty of individuals and state regulatory bodies – to name but a few – who would agree with the allegations laid out as part of Yee’s lawsuit. Nevertheless, Kalshi’s valuation, popularity and cultural foothold continues to advance at breathtaking pace – with the company’s valuation having jumped by $3bn since June – topping $5bn following a $300m cash injection last week.
Numerous states have sought legal injunctions against Kalshi, some finding more success than others. Nevertheless – at risk of sounding like a broken record – the onus still remains on the Commodity Futures Trading Commission to provide legal definitions as to whether or not sports events wagering contracts constitute as gambling.
Tags/Keywords
Players trust our reporting due to our commitment to unbiased and professional evaluations of the iGaming sector. We track hundreds of platforms and industry updates daily to ensure our news feed and leaderboards reflect the most recent market shifts. With nearly two decades of experience within iGaming, our team provides a wealth of expert knowledge. This long-standing expertise enables us to deliver thorough, reliable news and guidance to our readers.
Latest News
