A Kalshi executive appeared on Bloomberg TV and talked through a variety of issues, including the recent New York lawsuit and its work on prediction markets integrity.
Kalshi Head of Enforcement Robert Denault appeared Wednesday and discussed the hot topics surrounding the prediction markets operator.
The interview comes as New York Gov. Kathy Hochul sues Kalshi with the aim to shut down prediction markets in the state.
Kalshi pushes back on NY lawsuit
Hochul sued Kalshi last week, even as a case involving the New York State Gaming Commission and Kalshi moves forward in the courts.
The Wall Street Journal reported she turned down $10 million in tax revenue over five years to fund fire fighters and school teachers.
Denault said New York’s logic in the “far-reaching lawsuit” is flawed.
“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,” he said. “That’s not how any exchange in U.S. history has ever operated.”
Denault: not a gambling business
The cases involving Kalshi in New York alleges the company violates NY sports betting and gambling laws.
Denault said the operator is not running a gambling business.
“We don’t run a casino where people can come in and drink and play card games,” he said. “We don’t run a sportsbooks where we profit when people lose. What we do is run open marketplaces where users define the price point.”
Kalshi is ‘heavily regulated’
Denault told the program the platform is heavily regulated, including its own internal integrity programs.
He said there are 150 to 250 investigations per quarter, with up to 50 referrals made to the Commodity Futures Trading Commission already this year. He said Kalshi expects more disciplinary actions this year.
Most recently, Kalshi’s surveillance system flagged trades by White House teleprompter operator Gabriel Perez. ABC reported Perez made more than $100,000 in profits from trades on President Donald Trump word contracts during speeches.
Earlier this year, Kalshi settled with three political candidates who were caught trading on their own races.
