New York Attorney General asks court to force Kalshi to answer subpoena on influencer ads and market makers

New York Attorney General Letitia James has asked a state court in Manhattan to force prediction market operator KalshiEX LLC to comply with a subpoena her office issued on September 25, 2026, as part of a civil investigation into potential fraud and deceptive conduct in the prediction market industry.

The verified petition was filed in the Supreme Court of the State of New York, County of New York, under CPLR § 2308(b), the rule that lets a court compel compliance with a subpoena. The New York State Courts Electronic Filing system shows it as received on November 2, 2026. The first page carries no index number and states that the document had not yet been reviewed by the county clerk.

According to the petition, the Attorney General's office is investigating "whether Kalshi and/or third-parties on behalf of Kalshi made false and/or misleading representations and/or omissions in advertisements to consumers about Kalshi's business." The petition states: "To date, Kalshi has failed to produce a single document demanded by the Subpoena and therefore, is out of compliance."

What the subpoena demands

The petition lists the records sought, among other things, as:

• documents and communications on the marketing, advertising or promotion of Kalshi's business by Kalshi, Tarek Mansour, Luana Lopes Lara, other executives, directors or employees, or anyone hired to advertise the business;
• transactions on Kalshi's platform by people or entities hired to promote it, and payments Kalshi made to them;
• training materials, guidance, policies and procedures on marketing;
• proprietary trading, market making or liquidity provisioning by Kalshi on its platform, and arrangements with third-party market makers;
• the Kalshi Volume Incentive Program, Liquidity Incentive Program, Liquidity Provider Program, Combo Incentive Program and Market Maker Program;
• documents Kalshi has produced to other state or federal regulators or self-regulatory organisations on the same subjects.

The office says examining Kalshi's advertising, its arrangements with third parties that promote it, and "the role of Kalshi's in-house and external market makers" is critical to deciding whether Kalshi "(or others on its behalf) engaged in fraudulent or deceptive conduct."

The petition's allegations on market makers and influencers

The petition says Kalshi "has often touted" on X and in advertisements that it differs from traditional gambling platforms because it has no "house" and users trade against other users, and that co-founder and Chief Operating Officer Luana Lopes Lara has made similar statements. It alleges that on "combo" bets offered on the platform, the "users" on the other side "are either Kalshi Trading or Kalshi's approved market makers."

Citing a February 4, 2026 Bloomberg article, the petition says prediction market users were losing money faster than users of traditional gambling apps. It adds that other research found the bottom quarter of prediction market users lost $0.28 of every dollar they bet, compared with $0.11 on other online gambling sites.

On influencers, the petition cites Wall Street Journal reporting that prediction markets including Kalshi pay creators whose posts often do not disclose the payment, and says Kalshi "could be liable for a potential failure to prevent fraud and misinformation spread by its paid influencer agents." It says the National Advertising Division opened an inquiry into Kalshi's influencer disclosures and, after Kalshi declined to respond, said in a June 8, 2026 press release that it was referring the matter to regulators. The petition also cites a June 29, 2026 newsletter investigation into a Discord server that pays users to make clips and memes for Kalshi, some of whom appeared to use software "to simulate fake prediction market outcomes."

These are allegations in a petition supported by an affirmation from Nina M. Varindani of the Attorney General's office. They have not been tested in court.

Relief sought and related cases

The office asks the court for an order "directing Kalshi to comply with the Subpoena within 10 days or as soon thereafter as the Court deems just and proper and to pay OAG a penalty."

The same subpoena is already at issue in federal court. In People v. KalshiEX, the Attorney General's July 31 lawsuit accusing Kalshi of running an illegal gambling business, now before Judge Vernon S. Broderick in the Southern District of New York (No. 1:26-cv-06550), Kalshi asked in an October 30 joint letter for a protective order barring the office from using the September 25 subpoena to obtain discovery about that case. The Attorney General's office replied that the subpoena serves a separate fraud and false-advertising investigation and that no New York court had yet ordered Kalshi to comply. Judge Broderick had not ruled as of November 3.

Separately, the New York State Gaming Commission, also represented by the Attorney General's office, is seeking to enforce its own July 31 subpoenas against Kalshi in the same court. Justice Sabrina B. Kraus has set a December 14 hearing in that matter. AskSpinner covered the Gaming Commission's petition and tracks the other cases in its Kalshi and prediction market litigation tracker.

Kalshi had not publicly responded to the new petition as of November 3.

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