Prediction market platform Kalshi is facing a class-action lawsuit, accused of operating a sports betting business without a license.

Odaily Planet Daily reports that prediction market platform Kalshi is facing a class-action lawsuit, accused of operating sports betting without any state gambling license and making misleading statements to users regarding market-making activities. The lawsuit, filed by seven Kalshi app users with the law firm Lieff Cabraser Heimann & Bernstein, alleges that Kalshi falsely advertised its service as "legal sports betting," and that its affiliated company, Kalshi Trading, set unfavorable odds for users as a market maker, effectively turning trading into a bet against the "bookmaker." Kalshi responded that its business falls under the derivatives market and is only subject to federal regulation by the U.S. Commodity Futures Trading Commission (CFTC). (Bloomberg)