Kalshi Loses Court Bid to Override New York Gambling Laws
The ruling confirms that state gambling laws can apply to federally registered prediction markets, limiting Kalshi's argument for exclusive CFTC oversight.
Reporting from 1 source: GIGAZINE.
A federal judge rejected prediction market Kalshi's attempt to override New York state gambling laws. Kalshi had argued its sports-related trades are swaps, not gambling, and should be regulated solely by the CFTC. Judge Analisa Torres ruled that state gambling laws are complementary to federal law, not preempted. New York Governor Kathy Hochul and Attorney General Letitia James welcomed the decision. Kalshi said it will appeal.
Kalshi, registered with the Commodity Futures Trading Commission as a designated contract market, has long argued that its event contracts are financial swaps rather than gambling. New York's Gaming Commission ordered it to stop sports-related trading in October 2025, citing potential harm to young adults. Kalshi sued to block that order, claiming federal law preempts state gambling rules. Judge Analisa Torres of the Southern District of New York disagreed, writing that the Commodity Exchange Act leaves room for state regulation of incidental issues arising from DCM trading. New York Governor Kathy Hochul and Attorney General Letitia James issued a joint statement calling the ruling a victory for consumer protection. Kalshi has filed notice of appeal to the Second Circuit.
Synthesized by Yomimono from the 1 cited source below, including Japanese-language reporting where cited, then editorially reviewed before publishing.
Sources
- GIGAZINE 予測市場Kalshiによる賭博法無効化の試みを裁判官が却下