The Kalshi lawsuit, filed in the U.S. District Court for the Southern District of New York, alleges that the company allowed outside companies to intercept users' communications and platform activity without their knowledge or consent. The plaintiffs, Adrian Vazquez, Alexander Foley, and Nicholas Ross, seek to represent all individuals who used Kalshi's digital platforms and whose communications, personally identifiable information, or online activity was allegedly intercepted or disclosed to third parties.
Kalshi operates an online marketplace where users trade binary event contracts tied to real-world outcomes. The company's platform can involve a wide range of subjects, from entertainment to politics and international affairs. Users provide extensive personal and financial information to create and fund accounts, including identity verification information, and reasonably expect that information and their trading activity to remain private.
The complaint argues that because Kalshi involves wagering-like activity, users have a heightened privacy interest in keeping their Kalshi activity confidential. The lawsuit alleges that Kalshi shared trading-related information with outside companies, including Google, TikTok, LinkedIn, and others, through embedded tracking technologies and scripts.
The complaint states that third parties, including Google, TikTok, LinkedIn, and others, were able to monitor users as they interacted with Kalshi's Digital Platforms. This monitoring included browsing activity, pages viewed, event contracts reviewed, account interactions, and trades or attempted trades. The lawsuit further alleges that Kalshi employed over 60 different third-party trackers on its website, including technologies associated with Google, Meta, HypeLab, and Rokt.
The plaintiffs allege that Kalshi benefited commercially from the practice, stating the company utilized data from trackers to improve its advertising and marketing campaigns, reduce customer-acquisition costs, increase trading activity, generate revenue, and receive cash payments from the third parties receiving the data. The lawsuit also challenges Kalshi's user consent process, alleging that users were never required to affirmatively accept the company's legal terms or privacy policy before creating an account.
The privacy lawsuit adds to a growing list of legal challenges facing Kalshi. In recent months, the company has been sued in multiple states over allegations that its event contracts tied to sporting events amount to illegal, unlicensed sports betting rather than lawful prediction markets. Kalshi has consistently disputed those allegations, maintaining that its products are financial derivatives regulated by the Commodity Futures Trading Commission (CFTC).
The dispute has also drawn regulatory scrutiny from several states, including Massachusetts, Nevada, and Washington, where authorities have challenged or restricted sports event contracts offered by prediction market operators. Kalshi has not yet filed a response to the privacy complaint.
