Prediction markets like Kalshi and Polymarket often pitch themselves as a cleaner alternative to traditional sportsbooks, matching buyers and sellers in a peer-to-peer marketplace rather than acting as the casino house that profits when customers lose. But New York Attorney General Letitia James is now pressing the company to show that distinction is more than marketing language.

In a verified petition filed in New York County Supreme Court , James seeks to enforce a September 25th subpoena issued as part of a civil investigation into potential fraud and deceptive advertising in the prediction market industry. According to the filing, Kalshi has produced zero documents to date. The investigation examines marketing materials, payments to influencers on platforms like Discord and TikTok, and the role of Kalshi’s own affiliated trading arm and third-party market makers on the platform.…