New York AG asks court to force Kalshi to hand over documents sought in September subpoena

New York Attorney General Letitia James has escalated her office's dispute with prediction market operator Kalshi by asking a court to order the company to comply with a subpoena issued on September 25. The petition asks that Kalshi deliver the requested materials within 10 days of any court order.

The state alleges that Kalshi runs an unlicensed gambling business that should fall under New York regulation. Kalshi maintains that its products are not gambling and are therefore overseen by the Commodity Futures Trading Commission (CFTC).

The wider litigation has moved through several stages. In July, a federal judge denied Kalshi's request for a preliminary injunction against state officials. Kalshi appealed to the US Court of Appeals for the Second Circuit, which also refused an injunction pending appeal. The following day, the Attorney General's office began a case in state court, and Kalshi quickly moved it to federal court. The CFTC has since filed its own lawsuit against New York and issued an emergency order requiring Kalshi to keep its contracts available in the state despite the possibility of state enforcement. New York has also targeted Polymarket, suing the company in late September over alleged unlicensed gambling.

According to the report, the subpoena covers a broad range of records. These include advertising and influencer marketing materials, agreements and payments with people or firms hired to promote Kalshi, and trading activity connected to them. It also seeks internal marketing policies, such as training materials, guidance and procedures, along with records of Kalshi's proprietary trading and its arrangements with third-party market makers. Further requests concern the company's volume, liquidity-provider, combo and market-maker incentive programs, plus earlier disclosures made to other state or federal regulators on the same subjects.

Kalshi had until October 5 to provide the documents but did not meet that deadline. On October 30 it asked the court to quash the subpoena, arguing that the demand improperly seeks evidence on issues already at stake in the state's enforcement action. The court has yet to rule on either the petition or the motion to quash.