Kalshi state lawsuits widen as 38 attorneys general weigh in
Michigan Attorney General Dana Nessel sued Kalshi in March in Ingham County Circuit Court, arguing the company's event contracts function as illegal gambling under state law. New York's attorney general argues that Kalshi's CFTC registration is beside the point because the state classifies the contracts as wagers. Thirty-eight state attorneys general are now involved in litigation over Kalshi's event contracts. The state cases intersect with a broader CFTC rulemaking push on event contract oversight.
State courts are systematically rejecting the argument that federal CFTC registration blocks state gambling law. Kalshi now faces that argument failing in Michigan, New York, Wisconsin, Washington, and New Mexico. Traders holding contracts they understood as federally backed face sudden voiding risk where state courts rule.
Each additional state filing multiplies Kalshi's legal spend and forces geofencing decisions market by market. Polymarket holds identical CFTC registration, so every state playbook tested on Kalshi previews its own exposure. New York's attorney general sued Kalshi over the same gambling classification. Both platforms must build around state gambling law as the practical floor, not the federal order they registered under.