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Judge Torres denies Kalshi injunction in New York sports contracts case

Judge Torres denies Kalshi injunction in New York sports contracts case

The ruling leaves New York free to enforce gambling law against Kalshi’s sports-event contracts for now, even as the CFTC weighs national event-contract rules that could shape access across states.

Fact Check
Three independent sources confirm the claim. Crypto Briefing and Bloomingbit both report Judge Analisa Torres denied Kalshi's preliminary injunction in the New York case, and journalist Eleanor Terrett's X post corroborates the same facts. All confirm the ruling holds that NY gambling laws are not preempted by the Commodity Exchange Act for Kalshi's sports-event contracts. Crypto Briefing explicitly documents the court split referenced in the claim (Third Circuit favoring Kalshi vs. Ohio, Maryland, and New York denials), matching the claim's assertion that the ruling adds to a split over whether the contracts are federally regulated derivatives or gambling products.
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Summary

Judge Analisa Torres denied Kalshi’s request for a preliminary injunction against New York gaming regulators, leaving the state free for now to enforce its gambling laws against the company’s sports-event contracts while the case continues. In a July 7 opinion and order, Torres rejected Kalshi’s argument that the Commodity Exchange Act preempts New York’s gambling laws at this stage and said the company’s state-by-state geolocation costs amount to ordinary regulatory compliance burdens rather than irreparable harm. The ruling sharpens a two-track risk for prediction-market platforms: whether the Commodity Futures Trading Commission ultimately permits sports-related event contracts at the federal level, and whether states can still force venues to block, limit or redesign access before a national framework is settled. The decision comes as the CFTC’s proposed event-contract rules remain open for comment until July 27 following a June 12 Federal Register notice covering public-interest determinations for contracts involving gaming or activity unlawful under federal or state law. The dispute is part of a broader clash over whether sports-related prediction markets are federally regulated derivatives or state-regulated gambling products. The product category has widened beyond Kalshi, with Crypto.com describing its sports-event trading as a CFTC-regulated derivatives feature, Coinbase saying its prediction markets are available to U.S. residents except in Nevada, Gemini saying its affiliate Gemini Titan received a CFTC-designated contract market license, and the CFTC’s designated contract market list recording QCX LLC doing business as Polymarket US.

Terms & Concepts
  • Commodity Exchange Act: The U.S. law governing commodity derivatives markets and central to the dispute over whether federal rules override state gambling laws.
  • preliminary injunction: A temporary court order sought to block enforcement or preserve the status quo while a lawsuit proceeds.
  • geolocation: Technology used by online platforms to identify a user’s location so access can be limited on a state-by-state basis.