A second class-action lawsuit has been filed against Kalshi in New York.
The plaintiffs are named as Hallman, Kravetz, Greenberg, Bee and Gutta, and they, like other opponents of Kalshi before them, are alleging that the prediction market operator has acted unlawfully by offering sports event contracts.
The details bear notable significance to an earlier, still open, class action case filed by Daniel Yee in October.
Both actions attempt to establish a nationwide class of those who have traded in Kalshi’s sports event contracts, and both complaints state the intention to seek financial restitution for damages.
The case brought by San Francisco resident, Yee, is currently in stasis, with a pre-trial date having been delayed to give Kalshi’s lawyers time to construct their motion to compel arbitration or dismissal.
If Kalshi thought this meant the central claims were likely to disappear, it may have thought too soon, and a related case statement has been filed, asking the District Court of Southern New York to consider the two cases together.
The plaintiffs in both contests agree that Kalshi is unlawfully offering a form of sports betting from behind a protective veil of financial regulation, but the new case bolsters that argument with an additional rebuttal of Kalshi’s claim that its model is substantially different from sportsbooks.
Kalshi has consistently claimed that its model is peer-to-peer and driven by market liquidity, thereby setting it apart from the against-the-house model of traditional gambling enterprises.
According to the new set of plaintiffs, this is not true: “In its sportsbook, Kalshi plays the role of “the house” by utilizing its own affiliate (Kalshi Trading LLC) as well as other interested affiliates, as market makers. Specifically, Kalshi (or one of its affiliates) buys the other side of the sports bet, and if the bettor loses, then Kalshi, not some other user, collects the proceeds, just like a traditional sportsbook.”
What’s happening in Tennessee?
While the class actions pile up in New York, legal wrangles between Kalshi and state gaming regulators continue to advance.
The prediction market operator was issued a cease and desist by the Tennessee Sports Wagering Council on January 9, and this case has since been compelled to develop more quickly than others.
After Kalshi countersued for injunctive relief, the defendants reportedly indicated they were not willing to wait for a ruling before enforcing state law.
In response, Kalshi submitted staff testimonies to the court, explaining the irreparable damage that this enforcement would do to the company – the lawyers asked for a temporary restraining order to be granted.
Judge Trauger has expressed her belief that Kalshi's application for a preliminary injunction is likely to succeed, and so she decided to expedite the request.
This means that until a hearing on January 26, Kalshi will be allowed to continue trading sports contracts in the state.
Is Polymarket banned in Ukraine?
Polymarket has not been granted the same relief in Ukraine, where the National Commission for the Regulation of Electronic Communications has taken steps to prevent domestic access to the prediction market platform.
According to local reports, the web domain has been added to a registry of blocked websites.
Ukraine’s gaming regulator, Play City, deemed the company to be offering unlicensed gambling, and in this case, it seems there is less immediate appetite from Polymarket to resist the ruling.
Kalshi is currently facing a separate class action case in Illinois
