A federal judge in New York has rejected Kalshi's attempt to stop state regulators from enforcing gambling laws against the company's sports-related contracts.
Key Takeaways
- Kalshi has failed to block New York from enforcing gambling rules against its sports-related event contracts.
- Judge Analisa Torres rejected Kalshi's claim that federal commodities law leaves no room for state oversight.
- The ruling allows claims against individual commissioners but keeps New York's licensing position intact.
U.S. District Judge Analisa Torres denied Kalshi's request for a temporary restraining order and a preliminary injunction, according to a report from The Block.
Her ruling means the New York State Gaming Commission (NYSGC) can continue treating Kalshi's sports contracts as subject to state licensing rules, even though the company operates as a federally registered exchange.
.@Kalshi tried to get out of following our laws in New York.
— NY AG James (@NewYorkStateAG) July 8, 2026
They lost in court.@GovKathyHochul and I will continue to hold all gambling platforms accountable — including prediction markets.
The dispute began after Kalshi self-certified a batch of sports-related event contracts with the Commodity Futures Trading Commission (CFTC) in January 2025. It then started offering them to customers. New York requires anyone offering sports wagering products to hold a license from the NYSGC.
By October 2025, the NYSGC had sent Kalshi a cease-and-desist notice accusing it of running an unlicensed mobile sports wagering platform. Kalshi then filed a suit against the NYSGC and its members, arguing that the Commodity Exchange Act gives the CFTC sole authority over its products and leaves no room for state involvement.
Torres rejected that argument. She found that the Gaming Commission is protected from suit as a state agency, though claims against individual commissioners can move forward. On the substance, she concluded that Congress never intended to remove states' traditional authority over gambling and pointed to language in federal law that preserves that authority.
The judge also ruled that Kalshi's use of geolocation technology and its federal registration do not exempt it from New York's licensing requirements.
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Michigan also moves to shut down Kalshi's sports contracts
New York is far from the only state pushing back against Kalshi, and Michigan has taken an even more direct step by ordering the prediction market company to stop operating altogether.
Ingham County Circuit Judge Rosemarie Aquilina signed a 14-day temporary restraining order on June 29, requiring Kalshi to use geolocation to block sports-related contracts and advertising from reaching anyone in the state through July 13.
The order came at the request of Michigan Attorney General Dana Nessel, whose office sued Kalshi in March, arguing that its offerings function as unlicensed online sports betting under the oversight of the Michigan Gaming Control Board (MGCB).
Nessel's office argued that Kalshi had gained an unfair edge over sportsbooks and casinos that operate under strict state licensing and consumer protection rules.
MGCB Executive Director Henry Williams said the platform has been marketing sports betting to residents while presenting it as an investment product. He added that the agency intends to keep using every available regulatory and legal tool against the company.
Kalshi has said it plans to contest the order and maintains that it falls under exclusive federal jurisdiction through its CFTC registration. Failure to comply with the geolocation requirement carries a daily fine of $120,000 under the terms of the order.
