Judge lets New York enforce gambling laws against Kalshi prediction market

U.S. District Judge Analisa Torres ruled in Manhattan that Kalshi cannot block New York from enforcing its gambling laws against the prediction market platform. Torres found that the federal Commodity Exchange Act did not override New York gambling law as applied to Kalshi’s sports-event contracts and said Kalshi had not made the clear showing needed for a preliminary injunction.

The ruling leaves New York free to press ahead against contracts Kalshi began offering in January 2025 after self-certifying them with the Commodity Futures Trading Commission. Those markets include bets on who will advance in March Madness and who will win the U.S. Open Golf Championship. New York sent Kalshi a cease-and-desist letter on Oct. 24, 2025, and Kalshi sued three days later, arguing that its contracts were offered on a federally designated market under the CFTC’s exclusive jurisdiction. Torres also dismissed the New York State Gaming Commission from the case on Eleventh Amendment immunity grounds, while allowing the suit to continue against the individual commissioners in their official capacities.

Torres said New York’s interest in preventing gambling addiction, preserving sports integrity and avoiding a flood of unregulated contracts outweighed Kalshi’s claim that federal law should control. Her opinion said Kalshi had not shown it was likely to win on the merits. Kalshi appealed the ruling to the federal appeals court in Manhattan.

Gov. Kathy Hochul and Attorney General Letitia James said in a joint statement that “New York’s gambling laws are designed to protect consumers” and “We will continue to hold all gambling platforms accountable to the law - and that includes prediction markets.”

The broader clash has already spread beyond Manhattan. New York later filed lawsuits on April 21, 2026, against Coinbase Financial Markets and Gemini Titan over event contracts, while the CFTC filed amicus briefs on Feb. 17 in the Ninth Circuit and on May 12 in the Sixth Circuit arguing that it has exclusive jurisdiction over prediction markets. Congress first officially recognized event contracts in 1992 through the Iowa Electronic Markets and expanded the CFTC’s authority after the 2008 financial crisis. The CFTC has also challenged similar state actions in Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, Rhode Island and Wisconsin.