A federal judge has denied Kalshi’s request for a preliminary injunction, allowing New York regulators to continue enforcing the state’s gambling laws against the prediction‑market operator.
U.S. District Judge Analisa Torres issued a 22‑page opinion stating that Kalshi did not demonstrate a likelihood of success on its claim that the Commodity Exchange Act preempts New York’s gambling statutes.
The dispute originated in October 2025 when the New York State Gaming Commission sent Kalshi a cease‑and‑desist letter alleging unlicensed sports wagering. Kalshi responded with a lawsuit asserting that federal authority over its exchange barred state interference.
Kalshi began offering sports‑event contracts in January 2025 after self‑certifying with the Commodity Futures Trading Commission. The contracts enable users to trade on outcomes such as NCAA basketball tournament advancement and the U.S. Open golf champion.
The court concluded that the Commodity Exchange Act does not eliminate states’ traditional power to regulate gambling, rejecting Kalshi’s preemption argument.
Judge Torres noted that nothing prevents Kalshi from obtaining a New York license and operating a market that treats New York residents without discrimination.
The opinion also dismissed Kalshi’s reliance on CFTC inaction as proof of legality, emphasizing that New York gambling laws complement, rather than conflict with, federal regulations.
Kalshi failed to show irreparable harm, with the alleged injuries described as primarily monetary and concerns about a potential CFTC revocation deemed speculative.
The decision arrives as New York intensifies oversight of prediction markets, including an executive order barring state employees from using confidential government information to trade on such platforms.
State legislators are advancing a proposal to create a regulated framework that would prohibit contracts tied to sports, elections, disasters, deaths, and financial securities.
