\n Posted on: November 28, 2025, 12:40h.\u00a0\n <\/p>\n
\n Last updated on: November 28, 2025, 12:40h.\n <\/p>\n
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- Plaintiffs in national class action believe Kalshi\u2019s claims about superior odds compared to traditional sportsbooks are dubious <\/strong><\/li>\n
- Suit says Kalshi clients are actually betting against the house, dispelling notion of a purported peer-to-peer model<\/strong><\/li>\n
- Litigation claims Kalshi ran afoul of laws in California, Florida, and New York, among other states<\/strong><\/li>\n<\/ul>\n
A proposed class action lawsuit filed against Kalshi Wednesday in the US District Court for the Southern District of New York claims the prediction markets operator employs deceptive practices on sports event contracts and that the company is violating gaming and other laws in dozens of states.<\/p>\n
![\"Kalshi\"](\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2025\/03\/kalshi-430x242.png\")
A Kalshi advertisement. The company is facing a national class action suit alleging it employs shady sports betting practices. (Image: Kalshi)<\/figcaption><\/figure>\n Counsel for seven named plaintiffs claim that although Kalshi positions itself as a prediction market, it \u201coperates an unlicensed sports gambling platform\u201d \u2014 one that misleads consumers into thinking they\u2019re betting against each other and getting better pricing<\/a> than what they find with traditional sportsbooks. The litigation claims customers\u2019 reality is far different than what Kalshi pitches.<\/p>\n
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Defendants Kalshi Trading LLC and KalshiEX, both wholly owned subsidiaries of Kalshi, operates as highly sophisticated \u2018market makers,\u2019 which bet against consumers when their bets stray from Kalshi\u2019s internal projected odds,\u201d according to the complaint.<\/p>\n<\/blockquote>\n
Attorneys for the aggrieved parties also point out that Kalshi partners with hedge funds like Susquehanna International Group<\/a> to take opposing sides of customers\u2019 bets.<\/p>\n
\u201cMarket makers operate using a model indistinguishable from House betting in other illegal sports betting that the law expressly prohibits,\u201d according to the legal document. \u201cWhile consumers may bet on either side of the House in any sportsbook, the House sets the betting line, and profits when consumers pick wrong. Kalshi\u2019s market makers set the baseline. Upon information and belief, Kalshi coordinates directly with its market makers to set betting lines.\u201d<\/strong><\/p>\n
Kalshi Is no Friend of Retail Traders<\/h2>\n
It\u2019s widely known that Kalshi, which is facing mounting state-level legal opposition and losing some<\/a> of those cases, charges fees to smaller retail bettors and traders while limiting or eliminating those costs for sharp bettors and market makers in exchange for the liquidity those market participants provide.<\/p>\n
\nThat\u2019s one example of smaller bettors facing an uphill climb on Kalshi and data confirm that most market participants on the platform lose money. Some experts argue that the key to being consistently profitable on platforms like Kalshi is to identify markets that are mispriced. Sports event contracts, particularly those pertaining to popular sports such as football<\/a> and basketball, are unlikely to be mispriced with any regularity because those are highly liquid markets.<\/p>\n<\/div>\n
Counsel for the proposed class action assert Kalshi clients are being duped into thinking they\u2019re betting against peers when in reality they\u2019re wagering against Kalshi itself, which is supported by market makers with superior technological capabilities.<\/p>\n
\u201cConsumers do not realize they are actually being tricked into betting against Kaslshi,\u201d note the lawyers. <\/strong>
\u201cWhen consumers place bets on Kalshi, they face against money provided by a sophisticated market maker on the other side of the ledger.\u201d<\/strong><\/p>\nKalshi Violating State Laws, Claim Class Lawyers<\/h2>\n
The proposed class action also asserts Kalshi violated myriad state laws, including California\u2019s unfair competition law, various gaming laws in Florida, and New York\u2019s general business law. Those are potentially meaningful claims because New York is the largest sports wagering market in the US and because, in Florida, that form of wagering is controlled by the Seminole Tribe and it\u2019s permitted at all in California.<\/p>\n
\u201cBy operating unlicensed sports betting, Kalshi has violated gambling laws, engaged in illegal deceptive activity, and unjustly enriched itself at the expense of tens of thousands of consumers,\u201d the complaint says<\/a>. \u201cAccordingly, Plaintiffs on behalf of themselves and a Class of similarly situated individuals, bring this lawsuit to recover their wagers, as well as costs and attorneys\u2019 fees.\u201d<\/p>\n
The suit was filed just days after reports surfaced indicating Kalshi\u2019s valuation surged to $11 billion and a day after Robinhood Markets<\/a>, which has been a major source of Kalshi volume, said it\u2019s building its own prediction market platform.<\/p>\n<\/div>\n
- Suit says Kalshi clients are actually betting against the house, dispelling notion of a purported peer-to-peer model<\/strong><\/li>\n