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A federal judge has refused to stop New York regulators from enforcing the state’s sports gambling laws against Kalshi, handing the prediction market operator another setback in its fight over whether federally regulated event contracts can sidestep state gaming rules.
In a 22-page opinion issued Tuesday (July 7), U.S. District Judge Analisa Torres found Kalshi had not shown it was likely to prevail on its argument that the Commodity Exchange Act overrides New York’s gambling laws. The judge also dismissed the New York State Gaming Commission from the case under Eleventh Amendment immunity while allowing the lawsuit to continue against the individual commissioners in their official capacities. “For the foregoing reasons, Kalshi’s motion for a preliminary injunction is DENIED,” Judge Torres wrote in the order’s conclusion.
BREAKING: Kalshi denied preliminary injunction in crucial Southern District of New York case by Judge Analisa Torres. Major, major loss for Kalshi in the financial capital of the US, with likely knock-on effects in other cases (especially Connecticut and other SDNY lawsuits). pic.twitter.com/pLCobVo21S
— Daniel Wallach (@WALLACHLEGAL) July 8, 2026The dispute traces back to October 2025, when the New York State Gaming Commission sent Kalshi a cease-and-desist letter accusing the company of offering unlicensed sports wagering through its federally regulated prediction market platform. Kalshi quickly sued, arguing that Congress gave the Commodity Futures Trading Commission exclusive authority over its exchange and that New York could not interfere with federally regulated derivatives trading.
The company began offering sports-event contracts in January 2025 after self-certifying them with the CFTC. Those products allow users to trade on outcomes including “which teams will advance in certain rounds of the NCAA College Basketball Championship or who will win the U.S. Open Golf Championship,” according to the opinion.
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