Kalshi Market Maker Bets Against Consumers, Lawsuit Alleges

Kalshi Inc. was accused in a proposed class action of illegally operating as a sports bookmaker and misleading customers about its market-making activities, the latest in a series of legal challenges facing the predictions-market firm.

The complaint filed Wednesday in New York on behalf of seven Kalshi app users claims the firm misleads users by describing itself as offering “legal sports betting,” despite not having a gaming license in any state. The suit also alleges Kalshi’s affiliate Kalshi Trading acts as a market-maker that helps set betting lines disfavoring customers.

“When consumers place bets on Kalshi, they face off against ...