Nassau County Executive Bruce Blakeman has sharply criticized New York Governor Kathy Hochul, accusing her of costing the state potentially billions of dollars by filing a lawsuit to block the prediction market Kalshi.

Blakeman, a Republican gubernatorial hopeful, stated in a press release that Hochul's lawsuit, filed alongside Attorney General Letitia James, will prevent New York from receiving significant revenues. He asserted that the governor has "left billions on the table" that could have been used for tax cuts, law enforcement, and education funding.

"Kathy Hochul is truly the worst governor in America," Blakeman said, adding that the governor "just walked away from a lucrative settlement with Kalshi, a popular commodity predictor site." He linked the decision to New York's low economic outlook, stating, "No wonder New York is last in economic outlook in America. I will stop Hochul’s economic death spiral that has made it unaffordable to live and work in New York."

Kalshi operates as a federally regulated financial exchange where users can bet on the outcomes of future events, including elections, economic indicators, and sports. The lawsuit filed in Manhattan Supreme Court alleges that Kalshi is operating an unlicensed gambling operation and poses risks to consumers.

"Kalshi has chosen to ignore New York’s gambling laws, which exist to protect consumers, prevent problematic gambling, deliver funding for critical public services, and ensure that every company plays by the same rules," Governor Hochul said in a statement Friday. "This choice has consequences…"

Reports indicate that Kalshi had proposed a tax deal to New York similar to one reached with North Carolina. This deal would involve a 6% tax on prediction market trades, potentially generating up to $10 billion in tax revenue over five years, according to The Wall Street Journal. New York has seen substantial revenue from online sports gambling, with gross revenues reaching $1.7 billion in 2023 alone.

Kalshi co-founder and CEO Luana Lopes Lara has maintained that the company operates as a federally regulated exchange under the U.S. Commodity Futures Trading Commission, asserting that states cannot shut it down. A spokesperson for Kalshi told Bloomberg News that the situation represented "sad political theater."

In response to Blakeman's criticisms, a spokesperson for Governor Hochul's office defended the lawsuit. "Kalshi came to New York, blatantly violated state law, knowingly took actions that put consumers — including minors — at risk, and deprived New Yorkers of billions in revenue dedicated to critical programs like education," the spokesperson said. The office added, "Weak attempts to self-regulate are meaningless. If a company willfully violates state law, they must face consequences."

Similar attempts by other states, including Minnesota and Washington, to block Kalshi have also occurred.