Kalshi Faces Class Action Lawsuit, Accused of Conducting Sports Betting Operations Without a License

BlockBeats News, December 1st, according to Bloomberg, the prediction market platform Kalshi is facing a collective lawsuit, accusing it of conducting sports betting-related business without any state gambling license and making misleading statements to users about its market-making activities.

The lawsuit, filed by seven Kalshi app users and led by the law firm Lieff Cabraser Heimann & Bernstein, alleges that Kalshi incorrectly marketed its services as "legal sports betting" and that its affiliate Kalshi Trading, acting as a market maker, set odds unfavorable to users, effectively turning the trades into bets against the "house." In response, Kalshi stated that its business falls under the derivatives market category and is subject only to federal oversight by the U.S. Commodity Futures Trading Commission (CFTC).