Judge blocks CFTC bid, lets NY’s Kalshi case proceed

A federal judge denied the CFTC’s bid to halt New York’s lawsuit against Kalshi, allowing the state’s case over alleged illegal gambling to continue.

A federal judge has denied the Commodity Futures Trading Commission’s (CFTC) emergency request to halt New York’s enforcement action against prediction market operator Kalshi. Judge Jed S. Rakoff ruled that the CFTC had not shown a strong likelihood of success on the merits or a risk of irreparable harm, allowing New York’s case to move forward. The dispute centers on whether event-based contracts traded on CFTC-regulated exchanges fall under federal commodities law or state gambling laws. New York Attorney General Letitia James sued Kalshi, alleging it operates an illegal, unlicensed gambling business by offering contracts tied to sports, elections, and other events. Previously, the New York State Gaming Commission issued Kalshi a cease-and-desist order. While the ruling does not resolve the broader jurisdictional issue, it keeps the state’s case against Kalshi active. The CFTC may renew its motion before Judge Victor Marrero.