Story
Federal Judge Denies Kalshi's Bid to Block New York Gambling Law
Summary
A federal judge has rejected a request by prediction market platform Kalshi for a preliminary injunction to stop New York from enforcing its state gambling laws. The ruling marks a significant point in the ongoing jurisdictional dispute between state and federal regulators over the growing industry.
A federal judge in Manhattan has denied a request from prediction market platform Kalshi to block New York state from enforcing its gambling laws against the company. In her decision, U.S. District Judge Analisa Torres ruled that the federal Commodity Exchange Act did not supersede New York's laws regarding Kalshi’s sports-event contracts.
Judge Torres stated that New York's interests in preventing gambling addiction, preserving the integrity of sports, and avoiding a proliferation of unregulated contracts "heavily" outweighed Kalshi's interests. The judge concluded that Kalshi had not demonstrated a clear or substantial likelihood that it would succeed on the merits of its case.
Following the ruling, Kalshi filed an appeal with the federal appeals court in Manhattan. In a joint statement, New York Governor Kathy Hochul and Attorney General Letitia James welcomed the court's decision. "New York’s gambling laws are designed to protect consumers," they said. "We will continue to hold all gambling platforms accountable to the law — and that includes prediction markets.”
AdThe case highlights a broader conflict between state regulators and the U.S. Commodity Futures Trading Commission (CFTC) over who has the authority to police prediction markets. The CFTC has claimed "exclusive" jurisdiction over the industry. New York previously sued other platforms, including Coinbase Financial Markets and Gemini Titan, prompting the CFTC to sue the state in response.