New York Gaming Commission Goes to Court to Force Kalshi to Answer Subpoenas

New York's gambling regulator wants a Manhattan court to make Kalshi hand over records on its sports contracts, under-21 users and advertising, saying it needs them to decide on civil penalties. It is a second state route to a penalty alongside the attorney general's $36 billion suit, and it seeks documents, not a halt to trading.

• The New York State Gaming Commission, represented by Attorney General Letitia James's office, has petitioned New York County Supreme Court to compel Kalshi Inc. and KalshiEX LLC to comply with administrative subpoenas
• The subpoenas seek records on Kalshi's sports-event contracts, products offered to New Yorkers under 21, advertising describing its products as wagers or bets, and its ownership and corporate structure
• The petition says the Commission needs the material to "determine whether to issue civil penalties against Kalshi and others for violations of the Racing Law", Gambling Insider reports
• It follows a federal judge's refusal in July to block New York's enforcement, and the attorney general's separate suit seeking at least $36 billion, which Kalshi moved to federal court the day it was filed
• The petition is a request to the court and nothing has been decided; no public response from Kalshi had been found at the time of writing

The Regulator Asks a State Court to Make Kalshi Produce Its Records

The New York State Gaming Commission has asked the Supreme Court of the State of New York, County of New York, to compel Kalshi to comply with investigative subpoenas, according to a verified petition whose first page was posted publicly by sports betting attorney Daniel Wallach on 23 October. The court's e-filing system stamped it as received on 22 October. The respondents are Kalshi, Inc. and KalshiEX LLC; the posted page carries no index number.

The petition opens with an accusation. "For at least 18 months," it says, Kalshi has "operated a massive enterprise in New York designed to enable individuals to place wagers relating to sports and other matters." It states that the Commission's authority to investigate potential violations of the Racing, Pari-Mutuel Wagering and Breeding Law includes the power to issue investigative subpoenas and take testimony, that the law bars anyone from offering sports wagering without a Commission licence, and that Kalshi has not obtained one. Those are the Commission's allegations; no court has found that Kalshi broke state law.

According to Gambling Insider's report of the filing, the subpoenas cover four areas: Kalshi's sports-event contracts, products offered to New Yorkers under 21, advertising that describes its products as wagers or bets, and its ownership and corporate structure. The petition says the information is required to "determine whether to issue civil penalties against Kalshi and others", and that the subpoenas had gone largely unanswered since the summer. Cryptopolitan reports that they were issued on 31 July, the day the attorney general filed her suit, under section 104(7) of the Racing Law, and that the Commission alleges Kalshi refused key requests and gave insufficient answers to others. Section 104(9) of the same law empowers the Commission "to levy and collect civil penalties and fines for any violation of this chapter".

The Petition Joins a Crowded Docket

The petition adds a third New York proceeding to a dispute that began with the Commission's cease-and-desist letter of 24 October 2025. Kalshi sued the Commission in federal court in Manhattan that month, and on 7 July Judge Analisa Torres denied its motion for a preliminary injunction, finding that New York gambling laws as applied to its sports-event contracts are not pre-empted by the Commodity Exchange Act. She refused an injunction pending appeal on 27 July. Kalshi's appeal, No. 26-1835, is before the Second Circuit, where the Commodity Futures Trading Commission (CFTC) filed an amicus brief on 8 September, the Commission's brief as appellee is due on 30 October and an argument notice was issued on 21 October, according to the court docket.

The attorney general sued KalshiEX in the same Manhattan court on 31 July, seeking disgorgement, a penalty of three times Kalshi's gains and, according to the filing as reported by DeFi Rate, at least $36 billion in compensatory damages. Kalshi removed that case to federal court the same day. The state has moved to send it back, and the federal docket shows no ruling on that motion. On 11 August the CFTC used its emergency powers to order Kalshi to keep operating, treating the state's request for a restraining order as a market emergency. The CFTC has also sued New York, in a case filed in April, seeking a declaration that it has exclusive authority over event contracts.

The Commission Is Building Its Own Penalty Case

The attorney general's suit asks a court to award money. The petition points to a different mechanism: the Commission's own power to levy civil penalties under the Racing Law, for which it first needs evidence. That is why the requests turn on contracts, customers and corporate structure, and why the phrase "Kalshi and others" matters. The petition does not say who the others are, but a request for ownership and structure records is the step a regulator takes before deciding which entities a penalty should reach. Whether any penalty would survive the pre-emption argument Kalshi is pressing in the Second Circuit is a separate question that this petition does not ask the court to answer.

A Demand for Documents Is Harder to Call a Market Emergency

The CFTC's August order rested on the risk that a restraining order could stop a New York-headquartered exchange from trading anywhere. A subpoena enforcement petition, on the reported terms, seeks records and asks no court to halt a single contract. That makes it a harder target for the CFTC's emergency power, and gives the state a proceeding that can move while the larger cases wait on the remand motion and the appeal. Kalshi can still resist the subpoenas on the merits, and nothing public shows how it intends to respond.

The Under-21 and Advertising Requests Aim at the State's Strongest Ground

New York law defines a minor as anyone under 21 and requires a person placing a sports wager to be at least 21. Prediction markets regulated as financial venues across the United States admit customers from 18, and a CNN analysis estimated that users aged 18 to 21 had traded about $5.4 billion on Kalshi this year. The advertising request comes at the issue from the other side: if Kalshi's own marketing called its products bets, its argument that they are swaps becomes harder to make to a state judge. Both are consumer protection questions that a court can examine without first settling who regulates event contracts, the same ground the attorney general's suits against Kalshi and Polymarket both emphasise.

New York is now fighting Kalshi through its gambling regulator, its attorney general and a federal appeal at once, and this petition is the only front that asks for nothing more than documents. If the court grants it, the Commission could have the evidence to set a penalty before the Second Circuit has decided whether it may.