Attorney General James Joins Bipartisan Coalition Defending States’ Gambling Laws Against Prediction Markets

NEW YORK – New York Attorney General Letitia James today joined a bipartisan coalition of 37 other attorneys general in filing an amicus brief supporting Massachusetts’ lawsuit against the prediction market platform Kalshi for illegally offering sports betting in violation of the state’s gambling laws. Kalshi allows its users to bet on the outcomes of a wide range of events, such as elections and award shows, but it is primarily a sports gambling operation. In 2025, Kalshi reported its users bet over $1 billion every month on the platform, 90 percent of which was spent on sports betting. In September 2025, Massachusetts sued Kalshi for offering sports betting without following state gambling laws. In an amicus brief to the Supreme Judicial Court of Massachusetts, Attorney General James and the coalition argue that Kalshi must be subjected to state gambling laws and urge the court to reject Kalshi’s argument that the bets it offers on its platform are actually financial instruments that should be exclusively regulated by the Commodity Futures Trading Commission (CFTC).

“Prediction markets cannot ignore states’ gambling laws that are designed to protect consumers,” said Attorney General James. “Kalshi’s event contracts for sports are just illegal gambling by another name, and they should play by the same rules as every other licensed gambling platform. I am proud to join a diverse coalition of attorneys general in defending our states’ authority to set clear rules around sports betting to keep people safe.” 

Kalshi’s platform offers “event contracts,” which identify a future event and allow users to bet on whether or not it will happen. Kalshi’s website has a section dedicated to sporting events where users can bet on a wide variety of outcomes ranging from whether a certain team will win a game to how individual players will perform. In September 2025, Massachusetts sued Kalshi, alleging that Kalshi is violating state gambling laws by offering sports betting without a license. Earlier this week, Attorney General James filed similar lawsuits against prediction market platforms Coinbase and Gemini for violations of New York gambling laws.

In response to Massachusetts’ lawsuit, Kalshi has argued that the sports bets it offers are financial instruments called “swaps” that should be regulated by the CFTC, not states. Kalshi contends that a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank), which gives the CFTC authority to regulate swaps, preempts state regulation of sports betting and legalizes it nationwide.

Attorney General James and the coalition explain in their brief that this far-fetched argument is both baseless and wrong. The Dodd-Frank Act was intended to rein in the financial instruments that caused the 2008 recession, not permit sports gambling nationwide. At the time the provision was enacted, states were barred from legalizing sports gambling by the Professional and Amateur Sports Protection Act, which was in effect until the Supreme Court overturned it in 2018.

In addition, if Congress meant to overturn the long tradition of state regulation over gambling that dates to the founding of the country, it needed to have said so clearly. As Attorney General James and the coalition argue, the CFTC cannot claim exclusive authority to regulate the multibillion-dollar gambling industry based on a provision of law that does not even mention gambling at all. Kalshi’s argument violates important principles of federalism, which require Congress to clearly specify when it is changing the balance of power between the states and the federal government.

Attorney General James and the coalition also argue that states are best positioned to regulate sports betting. State gambling laws are designed to address the harms of gambling, prevent young people from being exposed to gambling, and direct tax revenue raised from gambling regulations to important projects like education and resources for problem gamblers. In contrast, the CFTC’s regulations do not focus on the specific risks of gambling at all. By stripping away states’ authority to regulate gambling, as Kalshi intends, states would have less power to protect consumers from predatory practices and other problematic behavior associated with gambling.

Attorney General James and the coalition are urging the court to affirm a lower court’s ruling, which prohibits Kalshi from allowing Massachusetts residents to bet on sports on its platform while this lawsuit is pending, unless Kalshi obtains the required license.

Joining Attorney General James in filing this amicus brief are the attorneys general of Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Hawai'i, Idaho, Illinois, Iowa, Kansas, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, Wisconsin, District of Columbia.