A federal judge shut down Kalshi’s attempt to override New York’s gambling laws. The prediction market operator wanted to prevent the state from enforcing its rules on sports-event contracts. Judge Torres wasn’t buying it.
Kalshi argued that federal commodities law preempts state gambling regulation. The court disagreed. Torres wrote that Congress didn’t intend to wipe out state authority over gambling when it passed the Commodity Exchange Act. States have traditionally regulated gambling, and nothing in the CEA clearly takes that away.
New York Governor Kathy Hochul and Attorney General Letitia James put out a joint statement: “New York’s gambling laws are designed to protect consumers. Kalshi tried to ignore them. Yesterday, they lost in court.”
This is one of several cases working through the courts. Kalshi actually won a victory in the 3rd Circuit, which ruled New Jersey can’t regulate sports bets on prediction markets. But they lost in the 6th Circuit on a similar case against Ohio.
The conflicting rulings make it increasingly likely the Supreme Court will eventually have to settle where federal jurisdiction ends and state authority begins on prediction markets. Kalshi says it’s appealing this decision.
