Kalshi can still offer sports event contracts in New York for now, but a federal judge has refused to protect the prediction market operator from future state enforcement while an appeal continues.
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U.S. District Judge Analisa Torres, who we reported on many times as the presiding judge over the infamous SEC vs Ripple case, rejected an emergency request from Kalshi to block the New York State Gaming Commission from applying state gambling laws to sports event contracts.
The ruling leaves Kalshi without a district court injunction as its case heads through the Second Circuit. However, New York Attorney General Letitia James has said regulators will not impose civil penalties before the legal dispute reaches a fuller resolution.
“Kalshi offers no new authority that would cause the court to now conclude that Kalshi has made a ‘strong showing’ of success on the merits,” Torres wrote.
Kalshi filed the emergency request on July 15 after Torres denied a temporary restraining order and preliminary injunction on July 7. The operator argues that the Commodity Exchange Act gives the Commodity Futures Trading Commission exclusive control over contracts traded on a federally registered exchange.
New York takes the opposite position. State officials classify sports event contracts as unlicensed sports wagering and say federal registration does not remove state authority over gambling activity.
Torres said the latest request largely asked the court to grant protection already rejected under the preliminary injunction standard.
“The Court held in the PI Order that Kalshi has not met its burden with respect to any of the four factors to be considered when adjudicating a motion for preliminary injunction,” Torres wrote. “Kalshi’s motion does not change this, and it does not point to any unusual or compelling circumstances which justify Kalshi’s requested relief.”
The New York decision arrived days after Kalshi reached an agreement with the Nevada Gaming Control Board. Kalshi must stop offering restricted sports and casino style event contracts to Nevada users through geofencing or face daily fines.
Different court results across the US have left no single national answer. Minnesota secured a temporary block against its prediction market ban this week, while judges in New York, Nevada, Ohio, and other states have given more room to local gambling regulators.
Torres also declined to treat a proposed CFTC prediction market rule as binding law. The proposal supports federal preemption for certain contracts, but no final rule has taken effect. Critics, including state regulators and tribal gaming groups, argue that Congress never intended the CFTC to oversee sports gambling through derivatives law.
The dispute began after the New York State Gaming Commission sent Kalshi a cease and desist notice in October 2025. Kalshi then sued to preserve access to the state market.
A Second Circuit ruling remains pending. A decision for New York could require Kalshi to block sports contract trading in the state while the full appeal proceeds.