A federal judge has denied Kalshi’s request for a preliminary injunction, allowing New York regulators to continue enforcing the state’s gambling statutes against the prediction‑market operator.
U.S. District Judge Analisa Torres issued a 22‑page opinion concluding that Kalshi is unlikely to prevail on its claim that the Commodity Exchange Act preempts New York’s gambling laws. The decision also dismissed the New York State Gaming Commission from the suit under Eleventh Amendment immunity while permitting the case to proceed against the individual commissioners in their official capacities.
The dispute originated in October 2025 when the New York State Gaming Commission sent Kalshi a cease‑and‑desist letter alleging the company offered unlicensed sports wagering through its federally regulated platform. Kalshi responded with litigation, arguing that congressional authority granted to the Commodity Futures Trading Commission precludes state interference with its derivatives trading.
Kalshi began offering sports‑event contracts in January 2025 after self‑certifying them with the CFTC. These contracts enable users to trade on outcomes such as which teams advance in the NCAA men’s basketball tournament or who wins the U.S. Open golf championship.
Judge Torres found that Kalshi had not demonstrated a clear likelihood of success on its preemption argument. The court held that New York gambling laws, as applied to Kalshi’s contracts, are not overridden by the Commodity Exchange Act, noting that Congress did not intend to eliminate states’ traditional authority over gambling.
The ruling rejected Kalshi’s contention that obtaining a New York license would conflict with federal law. The judge explained that the company could acquire the required license and treat New York‑resident participants without discrimination.
Reliance on the CFTC’s decision not to block the contracts was also dismissed. The court emphasized that agency inaction does not constitute proof that the contracts are permissible under the Commodity Exchange Act.
Kalshi’s claim of irreparable harm was found unconvincing, with the court describing the alleged injuries as primarily monetary and characterizing concerns about a potential revocation of its exchange designation as speculative.
The decision arrives as New York intensifies oversight of prediction markets. An executive order signed earlier this year prohibits state employees from using confidential government information to trade on such platforms, citing risks to public trust.
Legislative proposals are under consideration to establish a regulated framework for prediction markets while prohibiting contracts tied to sports, elections, disasters, deaths, and financial securities.
