A group of regular Kalshi users, some of whom are self-professed addicts, have filed a class-action lawsuit against the prediction market over its claims that it is not a betting platform.
Alexander Hallman, Jeremy Kravetz, Daniel Greenberg, Nathaniel Bee, and Abhijn Gutta are the plaintiffs, who have all reportedly lost money to Kalshi through various means. Part of this is “related deceptive and misleading business practices,” which have been highlighted online in its advertisements.
One advert detailed in the suit positions Kalshi as a way to get out of debt. The advertisement features a woman unable to pay her rent, but then “got two years of rent through Kalshi’s predictions.” However, this has not been independently verified by ReadWrite.
This ad I had not seen before was in the new class action against Kalshi.
I think we should all be able to agree on this: Advertising that if you are short on money, prediction markets are a good idea to fix that problem is at best misguided and at worst evil. pic.twitter.com/9To9JXhJuU
— Dustin Gouker (@DustinGouker) January 14, 2026
Other claims of Kalshi not being a gambling platform have been poked by the suit, as it highlights other adverts that use gambling terms.
As for the self-professed addicts, they accuse Kalshi of operating a sportsbook without any regulatory safeguards in place. As such, it’s been accused of encouraging “impulsive engagement,” as well as being exploitative and diminishing “user perception of financial risk.”
In particular, Kravetz, from Tennessee, is self-excluded from “all licensed legal sportsbooks” in the state. Kravetz claims that the lack of preventative measures from Kalshi prevents him from accessing the site. He unfortunately fell victim to their vices and went on to lose thousands.
The other advertisements in the lawsuit proclaim legality across all 50 states, which is technically true. As it’s still legally a “prediction market” and not an official “sportsbook,” Kalshi, Polymarket, and their partners can operate wherever they please.
Kalshi continues to wade through legal turmoil
Kalshi has been in embittered legal battles with certain indigenous tribes across the US, who claim that they’re running remote gambling or sportsbooks in states where they should be in control of it.
Kalshi and other prediction markets, Polymarket, have been heavily scrutinized in the last few months over their methods. Individual states trying to tackle what they call a new form of gambling are in a constant push and pull with the platforms. Despite this, Kalshi now has partnerships with NFL on FOX, and Polymarket has now been allowed to operate from within the US.
ReadWrite has reached out to Kalshi for comment.
Featured image: Kalshi
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