CFTC Steps In to Keep Kalshi Running in New York Amid State Lawsuit

The Commodity Futures Trading Commission has ordered prediction market operator Kalshi to keep operating in New York, stepping in after the state filed a lawsuit aimed at shutting the platform down. The commission invoked its emergency authority following a request from Kalshi after New York Attorney General Letitia James sued the company in late July.

Federal-State Clash Over Prediction Markets Deepens

The move marks the latest standoff between federal and state regulators over prediction markets. States argue that sports-related prediction markets amount to gambling and fall under their own laws, while the CFTC insists it holds authority because the products are federally regulated swaps traded across state lines.

CFTC Chair Pushes Back on State Oversight

CFTC Chairman Mike Selig said Congress never intended derivatives exchanges to answer to a mix of state gaming rules, arguing these are financial markets that match traders nationwide and operate through federally backed clearinghouses.

Legal Battle Continues in Court

New York’s lawsuit followed a judge’s rejection of Kalshi’s earlier bid to block the state’s legal action, with officials saying the company skipped licensing and tax obligations required of other gambling platforms. Motions over where the case should be heard remain pending.