Kalshi Faces Class Action Alleging Involvement In Unlicensed Sports Betting

• Plaintiffs say Kalshi ran unlicensed sports betting disguised as a regulated exchange.
• Suit claims users unknowingly wagered against market makers tied to Kalshi’s affiliate.
• Kalshi denies wrongdoing, calling the allegations competitor-driven and incorrect.

Kalshi Inc. is facing a new legal challenge as seven users of its prediction-market app have filed a proposed class action in New York, alleging that the firm operated unlicensed sports betting markets while presenting itself as a federally regulated exchange. The complaint, submitted on Wednesday, adds to the mounting scrutiny surrounding Kalshi’s sports-related event markets and questions the company’s disclosures about how trading activity is structured on its platform.

According to the filing, Kalshi promoted its sports markets as “legal sports betting” even though it does not hold gaming licenses …

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