Federal Judge Rejects CFTC Bid to Block New York’s Case Against Kalshi

A federal judge has turned down an emergency request from the Commodity Futures Trading Commission that sought to halt New York’s enforcement action against prediction market platform Kalshi. The judge ruled that the CFTC failed to demonstrate a strong likelihood of winning the case or facing irreparable harm, though the agency retains the option to file the motion again before a different judge later this week.

Background of the Legal Fight

New York’s Attorney General filed suit against Kalshi last week, accusing the platform of running an unlicensed gambling operation by offering contracts linked to sports outcomes, elections and other events. This follows a cease-and-desist order the state’s gaming commission issued to Kalshi back in October 2025.

Jurisdiction Dispute at the Core

The case centers on a broader legal question of whether federal commodities regulation overrides state-level gambling laws when it comes to event-based contracts traded on CFTC regulated exchanges. State officials maintain these contracts function as wagers falling under state gambling statutes, while the CFTC and Kalshi argue they qualify as derivatives under exclusive federal oversight.