A federal judge in Manhattan on Tuesday rejected Kalshi’s request for a preliminary injunction that would have paused New York from applying its gambling laws to the prediction markets platform.
U.S. District Judge Analisa Torres concluded that, as applied to Kalshi’s sports-event contracts, the federal Commodity Exchange Act (CEA) does not supplant New York’s gambling statutes. Torres wrote that the state’s aims - preventing gambling addiction, preserving the integrity of sports, and avoiding a proliferation of unregulated contracts - carry substantial weight against Kalshi’s interests in establishing federal primacy and averting alleged technology-related harms to customers.
"Kalshi has not, therefore, made a clear or substantial showing that it is likely to succeed on the merits," Torres wrote, adding that federal courts remain divided on the broader legal question.
Kalshi has appealed the decision to the federal appeals court in Manhattan. A lawyer for Kalshi declined to comment on the ruling.
New York officials welcomed the ruling. In a joint statement, Governor Kathy Hochul and Attorney General Letitia James said New York’s gambling laws are intended to protect consumers and that the state will continue to hold gambling platforms accountable - including prediction markets.
The ruling sits amid a larger clash between state regulators and the federal Commodity Futures Trading Commission (CFTC) over oversight of prediction markets. The CFTC disputes New York’s stance, citing what its chairman Michael Selig has described as the agency’s "exclusive" jurisdiction over commodity derivatives markets, a category it says encompasses prediction markets.
Prediction markets allow participants to wager on the outcomes of events such as sports contests and elections. The article notes these markets have grown in popularity since the 2024 U.S. presidential election, when their real-time probabilities were reported to be more accurate than polling in forecasting the result in which Republican Donald Trump prevailed over Democrat Kamala Harris.
Kalshi initially sued New York in October, after the state gaming commission ordered the platform to stop offering certain unlicensed sports-event contracts. Later, on April 21, New York filed lawsuits accusing Coinbase Financial Markets and Gemini Titan of promoting gambling through their own event contracts.
The CFTC filed suit against New York three days after those April 21 actions and has since said it challenged similar state regulatory efforts in Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, Rhode Island and Wisconsin.
The decision by Judge Torres leaves in place New York’s ability to enforce its gambling laws against Kalshi while the appeals process continues. Torres’ finding - that the CEA did not preempt state law as applied in this instance - reinforces a contested legal landscape in which federal and state authorities assert competing claims over regulation of emerging financial products that blend wagering and derivatives-style contracts.