The New York State Gaming Commission (NYSGC) has asked a Manhattan court to compel prediction market operator Kalshi to produce records driven by an investigation into potential violations of state gambling laws.
The dispute comes amid a legal battle over whether sports event contracts fall under state gambling regulations or federal oversight by the Commodity Futures Trading Commission (CFTC).
Kalshi maintains that its event contracts are federally regulated financial products, while New York authorities argue that the company has operated without the license required for sports wagering.
In a petition filed in New York County Supreme Court on Oct. 22, the commission sought an order requiring Kalshi Inc. and KalshiEX LLC to comply with investigative subpoenas and produce outstanding nonprivileged documents within 10 days of a court order.
The records sought include sports event contracts, advertising describing the products as bets or wagers, offerings available to New Yorkers younger than 21, and information about the companies’ ownership and corporate structure.
The commission alleges Kalshi has operated in New York for at least 18 months without obtaining a sports wagering license.
“The Gaming Commission seeks the documents and information requested in the Subpoenas so it can determine whether to issue civil penalties against Kalshi and others for violations of the Racing Law and, if so, in what amounts,” the petition states.
Kalshi objected to requests concerning users under 21, arguing that they “presuppose a gaming-age framework inapplicable to a CFTC-regulated exchange.”
It also challenged requests for shareholder information, describing the records as “confidential and competitively sensitive investor and capitalization information,” while raising concerns about investor privacy. The commission maintains that ownership details could help identify other parties potentially responsible for violations.
The subpoenas were issued on July 31 under Section 104(7) of New York’s Racing, Pari-Mutuel Wagering and Breeding Law, with an August 14 response deadline. According to the commission, Kalshi refused to produce documents responsive to eight requests and provided insufficient responses to others.
“Despite multiple court rulings declining to enjoin the Gaming Commission from enforcing the Racing Law, Kalshi nonetheless refuses to comply with key Subpoena requests necessary to assess the scope of Kalshi’s operations in New York,” the petition states.
The subpoenas followed a federal district court ruling denying Kalshi’s request for a preliminary injunction against enforcement of cease-and-desist orders issued by the commission in October 2025.
Separately, New York Attorney General Letitia James, whose office represents the commission, filed a lawsuit in July seeking $36 billion from Kalshi over allegations of operating an “illegal, unlicensed gambling operation.”
In April, the CFTC sued New York, seeking a declaration that federal law grants it exclusive authority over event contracts and an injunction against enforcement of allegedly preempted state laws. The subpoena proceeding is separate from that federal litigation and seeks document production. No ruling on the petition has been reported, and the allegations remain disputed.
Kalshi has not publicly responded to the petition. Kalshi has spent $1.79 million on federal lobbying this year, according to an Oct. 24 report.