Federal Judge Rejects Kalshi’s Bid To Block New York Gambling Enforcement

A federal judge has denied prediction market platform Kalshi’s request to stop New York from enforcing its gambling laws while litigation continues, dealing a setback in the company’s broader fight against state regulators.

Judge Rules Federal Law Does Not Preempt State Authority

Southern District of New York Judge Analisa Torres ruled Tuesday that New York’s gambling laws, as applied to Kalshi’s sports-event contracts, are not overridden by the federal Commodity Exchange Act. She found that Kalshi failed to show a strong likelihood of success on the merits, noting that regulating gambling falls under New York’s traditional police powers and that federal law leaves room for state oversight. The judge also pointed out that Kalshi remains free to pursue a New York gambling license. Kalshi has since appealed the ruling to the Second Circuit.

Case Could Influence Other State Battles

Sports law attorney Daniel Wallach described the ruling as a major loss for Kalshi, predicting it could impact the company’s ongoing disputes with more than a dozen other state regulators.

Part Of A Wider Regulatory Fight

Kalshi, which operates under CFTC oversight, continues clashing with states over its sports-event contracts. A Michigan judge issued a temporary restraining order against the platform last month, and Kalshi has also sued Illinois over a new law taxing prediction market transactions. Separately, the CFTC sued New York in April seeking exclusive federal authority over event contracts. Kalshi remains the largest prediction market platform globally, recording $33 billion in trading volume in June compared to Polymarket’s combined $13.95 billion.