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New York Gov. Kathy Hochul escalated the state’s fight with Kalshi this week, criticizing the company’s markets tied to FDA drug approvals while New York pursues a $36 billion lawsuit against the prediction market operator.
In a post on X, Hochul said offering contracts tied to cancer treatments crossed a line and added that New York would not let companies like Kalshi “break our laws.” The dispute adds another public flashpoint to a broader legal battle over whether Kalshi’s contracts amount to regulated prediction markets or unlicensed gambling.
Hochul targets markets on FDA approvals
According to the source report, Kalshi is offering contracts on whether the FDA will approve drugs for several diseases, including cancers. Reporting cited in that story also said Kalshi planned to offer contracts on drugs still in the trial stage.
Hochul wrote that “turning cancer patients into a prop bet” was unacceptable. Kalshi co-founder and COO Luana Lopes Lara pushed back on X, calling that “a flat out lie” and arguing the markets could help bring “more transparency and efficiency” to drug development.
The article also noted that researchers at Harvard Medical School and Brigham and Women’s Hospital submitted a public comment to the Commodity Futures Trading Commission last month asking the agency to prohibit these kinds of markets.
New York’s lawsuit could shape Kalshi’s future in the state
New York filed suit against Kalshi in state court on July 31, seeking $36 billion. The state filed at 12:01 a.m. — the first minute it was allowed to do so — after a federal district court and the Second Circuit denied Kalshi’s requests for an injunction, according to the report.
The source said New York calculated the figure by seeking three times Kalshi’s gains and adding $100,000 for every bet placed in the state. In its complaint, the state reportedly described Kalshi’s business as “quintessentially gambling” and said it was operating without a license.
If New York succeeds, the report said it would become the largest state to ban Kalshi’s contracts.
What New York users should watch next
For New York users, the immediate issue is legal status, not product expansion. The key questions are how the state case proceeds, whether Kalshi can shift the matter into federal court, and whether the CFTC responds to calls to restrict drug-approval markets. Those developments could help determine whether Kalshi can keep offering contracts in New York.
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Source: As reported by ingame.com.
