Judge rejects Kalshi bid to block New York gambling enforcement law

A federal judge has rejected Kalshi's attempt to prevent New York from enforcing its gambling laws against the prediction markets platform. U.S. District Judge Analisa Torres in Manhattan ruled on Tuesday that Kalshi was not entitled to a preliminary injunction, finding that the federal Commodity Exchange Act does not override New York's gambling laws as they apply to Kalshi's sports-event contracts.

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New York's gambling laws are designed to protect consumers. We will continue to hold all gambling platforms accountable to the law - and that includes prediction markets.

Judge Torres stated that New York's interests in preventing gambling addiction, maintaining sports integrity, and avoiding unregulated contracts "heavily" outweigh Kalshi's arguments about federal law primacy and customer technology issues. She noted that Kalshi had not made a substantial showing of likely success on the merits, and that other federal courts have differing opinions on the matter.

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Kalshi has appealed the decision to the federal appeals court in Manhattan. New York Governor Kathy Hochul and Attorney General Letitia James welcomed the ruling, asserting that the state's gambling laws protect consumers and that all platforms, including prediction markets, will be held accountable. This ruling comes amid a broader dispute over regulatory authority in the rapidly growing prediction market industry, with the U.S. Commodity Futures Trading Commission (CFTC) claiming "exclusive" jurisdiction over such markets.

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Kalshi has not, therefore, made a clear or substantial showing that it is likely to succeed on the merits.