USA – NEW YORK Trends and Developments Contributed by: Mitchell Schuster and Richard T. Lobas, Meister Seelig & Schuster
States Constitution. Kalshi seeks a permanent injunc - tion prohibiting the NYSGC from enforcing New York laws that seek to regulate Kalshi’s prediction markets. Kalshi also filed a motion for a preliminary injunction and temporary restraining order enjoining the NYSGC from enforcing New York laws against Kalshi’s predic - tion markets during the pendency of the action. Nota - bly, the parties stipulated that the NYSGC would not take any enforcement action against Kalshi pending the Court’s disposition of Kalshi’s motion for a prelimi - nary injunction and temporary restraining order. The motion remains pending. Indigenous tribes have also weighed in on this Kalshi case. On 8 December 2025, several indigenous tribes and gaming associations filed a brief as amici curiae in support of the position of the state Attorneys General. These amici argue that Kalshi has unlawfully entered into the gaming market, adversely impacting tribal gaming revenue and in some cases improperly infring - ing on tribes’ compacts with states wherein tribes are the exclusive operators of certain types of gaming within a particular state. Another such case is a proposed class action against Blockratize, Inc (doing business as Polymarket), newly filed in the United States District Court for the South - ern District of New York (case number 1:26-cv-00973). The complaint alleges that Polymarket operates as an unlicensed online sportsbook in violation of New York’s Racing Laws. In what is becoming a familiar playbook, the complaint notes that users can place bets on sports related events, including individual player metrics and events outside the sports world, like political elections. Importantly, the complaint emphasises the significant revenue sports-specific contracts generate for Polymarket, alleging that Poly - market has generated over USD6 billion in earnings on sports-related contracts. As Attorney General James echoed in her recent alert, the complaint accuses Polymarket of misleadingly promoting itself as a “pre - diction market” rather than what plaintiffs argue is its true function, a sportsbook. According to the com - plaint, Polymarket’s characterisation of its operations is designed to evade regulatory scrutiny and mislead consumers.
Another similar case is Hallman, et al. v KalshiEX LLC et al. (case number 1:26-cv-00317), pending in the United States District Court for the Southern District of New York. There, similar to the Polymarket case, plain - tiffs argue that Kalshi operates a sportsbook and that it should not be permitted to circumvent state gaming laws and regulations simply by characterising itself as a contract marketplace. In the proposed class action, the Hallman plaintiffs attack one of Kalshi’s key argu - ments – that its prediction markets are not the func - tional equivalent of sportsbooks because they simply connect users on opposite sides of a given position. The Hallman plaintiffs instead allege that Kalshi actu - ally operates as any other sportsbook “house” by taking positions on contracts through its own affiliate Kalshi Trading LLC and “other interested affiliates”. The case is newly filed and remains pending. Bigger picture – protecting the integrity of the game The increased focus on, and scrutiny of, prediction markets in New York is part of a larger mosaic of developments in sports wagering. These develop - ments are the result of the obvious need for action to protect not only consumers, but the integrity of sport, in the face of the popularity and ubiquity of sports betting. New legislation introduced Several pieces of legislation have recently been intro - duced in the New York State Assembly related to sports betting and specifically targeting prediction markets. Assembly Bill A09251, known as the ORA - CLE Act, would generally prohibit prediction market platforms from offering any sports wagering contracts to New York residents. If enacted, the effect of such legislation remains unclear, in light of the ongoing dis - pute over authority to regulate and given that the New York Attorney General has already indicated an intent to use the existing Racing Laws for that purpose. Additionally, Assembly Bill A09343 was recently introduced and takes aim at in-play and “live” sports wagers. Such live bets have become a popular feature of sportsbooks, and include wagers placed after a game has started with constantly updating odds and bets tied to individual plays. If enacted, the law would prohibit accepting in-play sports wagers.
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