Kalshi Faces Class Action Over Sports Betting Allegations
Market company Kalshi is embroiled in a new legal battle as seven users filed a class action in a New York court, accusing the firm of misleading customers by branding itself as a provider of "legal sports betting" without holding state gambling licenses. The plaintiffs allege Kalshi Trading acts as a market-maker, skewing odds against retail participants.
Lieff Cabraser Heimann & Bernstein, the firm behind the lawsuit, claims Kalshi facilitates "illegal, unregulated wagers" against a proprietary trading desk. This compounds existing scrutiny from state regulators and Native American groups targeting the company’s operations.
Co-founder Luana Lopes Lara dismissed the allegations as baseless, asserting Kalshi operates a CFTC-regulated derivatives market rather than a gambling platform. The case highlights the regulatory gray area between financialized prediction markets and traditional sports betting.
