Overview
- A federal judge in Manhattan denied Kalshi’s request for a preliminary injunction on Tuesday, leaving New York free to enforce its gambling laws against the company’s sports‑event contracts.
- The court found Kalshi had not shown the Commodity Exchange Act likely preempts New York law for those contracts and said complying with state rules would not necessarily conflict with federal requirements.
- Judge Torres dismissed the New York State Gaming Commission on Eleventh Amendment grounds but allowed the suit to continue against individual commissioners in their official capacities.
- Kalshi filed an immediate appeal to the U.S. Court of Appeals for the Second Circuit as the ruling deepens a split in federal courts and comes while the CFTC presses its claim of exclusive federal jurisdiction in parallel litigation.
- Practical effects could include state geofencing, licensing demands, account blocks for residents, and higher compliance costs for platforms, with the Second Circuit or the Supreme Court expected to decide whether a nationwide rule replaces the current patchwork.