Kalshi Enforcement Head Says Platform Isn't a Sportsbook or Casino, Criticizes New York Lawsuit

Robert DeNault, the Head of Enforcement for Kalshi, an online prediction market platform, appeared on Bloomberg TV to discuss several issues, including the recent lawsuit in New York, in which U.S. District Judge Analisa Torres denied the company's bid to block the state from enforcing its gambling laws against it. 

This also came after the state's governor, Kathy Hochul, filed a lawsuit seeking to shut Kalshi down. 

According to a report from The Wall Street Journal, Kalshi proposed a state tax revenue agreement similar to North Carolina (6%). This would've raised $10 billion over five years, according to a source the Journal spoke with. 

Kalshi Pushes Back Against Gambling Claims

“Any federally regulated exchange that’s operating with a federal license and overseen by a federal regulator can suddenly be subject to the whims of state criminal enforcement if the AG of a particular state wakes up and decides one day that these contracts actually come within New York State gambling laws,” DeNault said. “That’s not how any exchange in U.S. history has ever operated.”

In response to New York alleging Kalshi violates New York gambling laws, he said the company isn't a gambling outfit. 

“We don’t run a casino where people can come in and drink and play card games,” he said. “We don’t run a sportsbook where we profit when people lose. What we do is run open marketplaces where users define the price point.”

Kalshi Details Internal Enforcement Efforts

DeNault went on to say that Kalshi is regulated not only by the Commodity Futures Trading Commission but also by its own internal integrity programs. He said that the company undergoes upwards of 250 investigations per quarter and that there are already up to 50 referrals to the Commodity Futures Trading Commission this year, with more action on the way. 

A popular example of this recently was Kalshi flagging trades made by Gabriel Perez, a White House teleprompter operator who traded on "Mentions" contracts involving Trump's speeches, since, due to the nature of his job, he would come into contact with the written speeches. He made more than $100,000 in profit, and in response, Trump called his actions a "disgrace."