Gov. Kathy Hochul’s lawsuit to block the hot prediction market Kalshi could deprive the Empire State of as much as $10 billion, GOP gubernatorial hopeful Bruce Blakeman said Sunday.
Blakeman, the Nassau County executive, said in a scathing statement that the suit filed Friday by Hochul and Attorney General Letitia James against the federally regulated operator will deprive the state of a fortune in much-needed revenues.
“Kathy Hochul is truly the worst governor in America,” Blakeman said in a statement. “Hochul just walked away from a lucrative settlement with Kalshi, a popular commodity predictor site. Hochul left billions on the table that could have been used to cut taxes, hire cops and invest in education.
“No wonder New York is last in economic outlook in America,” he said. “I will stop Hochul’s economic death spiral that has made it unaffordable to live and work in New York.”
Kalshi is a federally regulated financial exchange market that allows users to wager on real events like elections, economic information and sports.
However, the lawsuit filed in Manhattan Supreme Court claims Kalshi is illegal running a gambling operation without a state license and putting consumers at risk.
“Kalshi has chosen to ignore New York’s gambling laws, which exist to protect consumers, prevent problematic gambling, deliver funding for critical public services, and ensure that every company plays by the same rules,” Hochul said in a statement Friday. “This choice has consequences…”
Other states, including Minnesota and Washington State, have tried to block Kalshi.
But Blakeman maintains it’s a major blunder by Hochul and James.
Kalshi has reportedly proposed the state a deal — similar to one cut with officials in North Carolina — that offers a 6% tax on prediction market trades, which could raise $10 billion in tax revenues over five years, according to the Wall Street Journal.
New York is already a major winner in online sports gambling operations, netting $1.7 billion in gross revenues in 2023 alone, the outlet reported.
Kalshi co-founder and CEO Luana Lopes Lara has argued that states can’t shut it down because it operates as a federally regulated exchange under the US Commodity Futures Trading Commission.
“It’s sad to see this type of political theater from the leadership in our own state,” Elisabeth Diana, a spokeswoman for Kalshi, told Bloomberg News last week.
In a statement Sunday, Hochul’s office didn’t respond to Blakeman’s charges but defended the lawsuit.
“Kalshi came to New York, blatantly violated state law, knowingly took actions that put consumers — including minors — at risk, and deprived New Yorkers of billions in revenue dedicated to critical programs like education,” spokesman Sean Butler said in a statement.
“Weak attempts to self-regulate are meaningless,” Butler said. “If a company willfully violates state law, they must face consequences.”
