New York seeks to block Kalshi, pursue triple alleged gains and $100,000 penalties

New York is continuing its case to stop prediction-market exchange Kalshi from offering what the state describes as unlicensed gambling contracts, after a federal judge rejected the Commodity Futures Trading Commission’s emergency request to pause the state’s enforcement action. Judge Jed S. Rakoff denied the request without prejudice, finding the CFTC had not shown a strong likelihood of success on the merits or irreparable harm, and said the agency may refile before Judge Victor Marrero by Aug. 7. The dispute centers on whether federal commodities law preempts New York gambling enforcement against event contracts tied to sports, elections and other outcomes. Attorney General Letitia James sued Kalshi last week, alleging the company operated an illegal and unlicensed gambling business. New York has separately sought a permanent block in Manhattan state court, customer and wager records, restitution, damages, disgorgement, prejudgment interest and costs, including three times Kalshi’s alleged gains and $100,000 for each unauthorized offer or attempted offer of sports wagering or mobile sports wagering within or from New York. Kalshi and the CFTC argue the contracts are derivatives subject to the CFTC’s exclusive jurisdiction, while New York regulators contend they are bets that fall under state gambling law. The fight follows a cease-and-desist order the New York State Gaming Commission sent to Kalshi in October 2025.