New York AG seeks court order on Kalshi advertising documents

Letitia James’s office says Kalshi has produced none of the records requested in a September subpoena on influencer deals and promotional payments.

Key takeaways:

• New York Attorney General Letitia James filed a petition on November 2 asking a court to compel Kalshi to comply with a subpoena issued on September 25.
• Her office says Kalshi had produced none of the requested documents when the petition was filed.
• The subpoena covers marketing campaigns, influencer agreements, payments to third parties and trading activity by people or firms hired to promote Kalshi.
• Kalshi asked a federal judge for a protective order on October 30, arguing New York is using the request to gather evidence for its gambling enforcement case.

US.- New York Attorney General Letitia James is seeking a court order requiring Kalshi to hand over internal documents as part of an investigation into the prediction market operator’s advertising practices. In a petition filed on November 2, her office asked the court to compel the company to comply with a subpoena issued on September 25.

The request covers records related to Kalshi’s marketing campaigns, agreements with influencers, payments to third parties and trading activity by individuals or companies hired to promote the platform. The Attorney General’s office said the company had not produced any of the requested documents by the time the petition was filed.

The request also covers the company’s internal marketing policies and training materials and documents previously submitted to other regulators. James’s office is investigating whether Kalshi or third parties working on its behalf made false or misleading statements in advertisements. The petition asks the court to require the company to produce the requested material within 10 days of a potential enforcement order.

Kalshi has contested the subpoena. On October 30, it asked a federal judge for a protective order, arguing that New York was using a separate document request to obtain evidence for its ongoing gambling enforcement case. The Attorney General’s office, however, maintains that the subpoena relates to a distinct investigation into potentially deceptive advertising practices.

Recently, the New York State Gaming Commission asked a Manhattan court to order Kalshi to comply with subpoenas seeking information about its operations in the state. The petition states that the commission needs the records to determine whether the companies violated New York’s gambling laws and should face civil penalties.

According to the petition, the regulator issued subpoenas to both companies on July 31, requesting records by August 14 under Section 104(7) of New York’s Racing, Pari-Mutuel Wagering and Breeding Law. The requests cover Kalshi’s sports-event contracts, its offerings to people under 21 in New York, advertising that describes its products as wagers or bets, and information about its ownership and corporate structure.

Frequently asked questions (FAQs)

• Why is the New York Attorney General investigating Kalshi? James’s office is investigating whether Kalshi or third parties working on its behalf made false or misleading statements in advertisements. The inquiry focuses on how Kalshi promotes its products and whether its advertising complies with consumer protection rules, rather than on whether sports event contracts are gambling.
• What documents has New York requested from Kalshi? The subpoena covers marketing campaigns, influencer agreements, payments to third parties and trading by people or firms hired to promote Kalshi. It also seeks internal marketing policies, training materials, proprietary trading and market-making arrangements, incentive programmes and documents previously submitted to other regulators.
• What is the New York State Gaming Commission seeking from Kalshi? In a petition filed on October 22, the commission asked a Manhattan court to order Kalshi Inc. and KalshiEX LLC to comply with subpoenas on their New York operations. It says it needs the records to determine whether they violated the state’s gambling laws and should face civil penalties.