Kalshi’s list of legal battles now includes one with citizens in addition to state governments.
Last week, a group of individuals from across the United States filed a class action against the site related to its offering of sports-related event contracts.
Filed in the Southern District of New York, it is the second such lawsuit filed in the district, following one that was filed in October. The law firm representing the plaintiffs in the first lawsuit is the Almeida Law Group, a firm that is no stranger to gaming-related class actions. The firm represents the plaintiffs in the pending litigation in California against DraftKings and PrizePicks as well as some sweepstakes-related lawsuits.
The uniting thread of all of the cases is that the product being offered is tantamount to illegal gambling and the plaintiffs are seeking damages and restitution. To date, none of the cases have been resolved.
The plaintiffs in the second lawsuit are represented by Lieff Cabraser Heimann & Bernstein, a firm renowned for its class action results ranging from everything from Big Tobacco to Big Pharma.
The latest class action features plaintiffs from California, Texas, New York, Florida, Arizona and New Mexico. Some of those state gaming regulators or tribes are in the midst of legal action against Kalshi, while others, such as Texas and Florida, are states where sports-related event contracts have not received any pushback.
The suit alleges that Kalshi began as a site that focused on swaps with economic utility, but that the company “got greedy” and changed its focus in 2025 to allow for rampant illegal sports betting in the form of sports contracts, noting that 90% of the trading on the platform is related to sports.
The claim also takes issue with the fact that, though Kalshi markets itself as an exchange, its affiliate arm participates in trading on the site, which the plaintiffs claimed is tantamount to against-the-house sports betting.
Plaintiffs also pointed out that Kalshi’s own marketing openly and regularly refers to its product as sports betting but fails to have many of the mandatory safeguards in place that are required of legal gambling.
In both class actions, the plaintiffs are seeking the opportunity to enjoin more Kalshi users into the case and seek damages and restitution for those who have used the platform.
