TLDR A federal judge denied Kalshi’s request to stop New York from enforcing its gambling laws against the company. Judge Analisa Torres ruled that state gambling authority is not overridden by federal commodities law. New York’s Gaming Commission sent Kalshi a cease-and-desist letter in October 2025 over unlicensed sports contracts. The ruling could affect related legal fights involving the CFTC, Coinbase, and Gemini. Kalshi still has the option to apply for a New York gambling license.
A federal judge in New York has ruled against Kalshi in its fight to keep offering sports prediction contracts in the state. The decision came from Judge Analisa Torres of the Southern District of New York.
Torres denied Kalshi’s request for a temporary restraining order and a preliminary injunction. Her ruling means New York can continue enforcing its gambling laws against the company’s sports-related contracts.
Kalshi runs a platform where users trade contracts tied to real-world events. Some of these contracts are based on sports outcomes, like which team advances in a tournament or who wins a golf championship.
Why the Court Sided With New York
Kalshi argued that the Commodity Exchange Act gives the Commodity Futures Trading Commission sole authority over its contracts. Under that argument, states would have no power to regulate them.
Judge Torres disagreed. She wrote that gambling regulation has long been handled by individual states, and Congress did not remove that authority when it wrote the federal law.
The court pointed to a savings clause in the statute. That clause was written to preserve state power over gambling, even as federal regulators oversee commodity trading.
Torres also noted a “Special Rule” in the law. It lets the CFTC block contracts tied to activity that is illegal under state law, which the judge said shows Congress expected