A New York judge denied the CFTC's request for a temporary restraining order to block New York's enforcement case against prediction market operator Kalshi. The ruling allows New York's case to proceed while the CFTC can renew its motion.
The ruling allows New York's case against Kalshi to continue, potentially impacting the regulatory landscape for prediction markets and event contracts, and highlights the ongoing jurisdictional battle between state gambling regulators and federal commodities authorities.
A New York judge has denied the Commodity Futures Trading Commission's (CFTC) emergency request for a temporary restraining order that would have halted New York's enforcement action against prediction market operator Kalshi. Judge Jed S. Rakoff ruled that the CFTC had not demonstrated a high likelihood of success on the merits or a likelihood of irreparable harm, leaving New York's case to proceed. The CFTC has the option to renew its motion before Judge Victor Marrero on August 7.
New York Attorney General Letitia James initiated the lawsuit against Kalshi last week, alleging that the company operates an illegal, unlicensed gambling business by offering contracts based on various events, including sports and elections. This action follows a cease-and-desist order issued by the New York State Gaming Commission in October 2025.
The dispute centers on a jurisdictional question: whether federal commodities law preempts state gambling enforcement concerning event contracts traded on exchanges regulated by the CFTC. State authorities view these contracts as wagers subject to state gambling laws, whereas the CFTC and Kalshi maintain they are derivatives falling under the CFTC's exclusive jurisdiction.