TLDR The CFTC filed a lawsuit against New York state officials, including AG Letitia James and Governor Kathy Hochul, over prediction market regulation The suit argues federal authority over event contracts should override state gaming laws New York had previously issued cease-and-desist orders to Kalshi and sued Coinbase and Gemini over sports and election contracts The CFTC also filed a brief in a Massachusetts court case involving Kalshi New York officials fired back, saying their gambling laws protect consumers and they will keep enforcing them
The Commodity Futures Trading Commission is taking its fight over prediction markets to new fronts. On April 24, the agency filed a federal lawsuit against the state of New York and submitted a legal brief in a Massachusetts court case.
The CFTC’s complaint was filed in the U.S. District Court for the Southern District of New York. The defendants include Attorney General Letitia James, Governor Kathy Hochul, and leaders of the New York State Gaming Commission.
The core argument is one the CFTC has made before. The agency says its federal authority over event contracts should take priority over state gambling laws. It is asking the court for a permanent injunction against the New York officials.
This is not the first time the CFTC has made this kind of move. The agency has filed similar lawsuits against Arizona, Connecticut, and Illinois in recent months.
Why New York Became a Battleground
The lawsuit points to two key events that triggered the action.
In October 2025, the New York State Gaming Commission sent a cease-and-desist notice to Kalshi. The commission said the company’s sports contracts amounted to illegal sports betting without a state license.
Kalshi responded by filing its own federal lawsuit against New York officials almost immediately after receiving the notice.
Then last