The CFTC ordered Kalshi to continue operating in New York after the state sued to stop the company’s sports-related prediction markets. The dispute highlights a widening fight over whether these markets should be treated as federally regulated derivatives or state-regulated gambling products.
The CFTC ordered Kalshi to continue operating in New York after the state sued to stop the company’s sports-related prediction markets. The dispute highlights a widening fight over whether these markets should be treated as federally regulated derivatives or state-regulated gambling products.
The U.S. Commodity Futures Trading Commission has ordered prediction market operator Kalshi to continue offering its markets in New York, after the state sued the company in an effort to shut down its sports-related contracts. The federal regulator said it used emergency authority after Kalshi sought help following a lawsuit from New York Attorney General Letitia James at the end of July.
The U.S. Commodity Futures Trading Commission has ordered prediction market operator Kalshi to continue offering its markets in New York, after the state sued the company in an effort to shut down its sports-related contracts. The federal regulator said it used emergency authority after Kalshi sought help following a lawsuit from New York Attorney General Letitia James at the end of July.
The move matters because it escalates a broader jurisdictional fight over prediction markets. State regulators have argued that sports-related prediction markets resemble gambling and should be subject to state gaming rules, while the CFTC says these markets fall under its authority because they involve federally regulated swaps.
CFTC Chairman Mike Selig reiterated that position, saying Congress did not intend for derivatives exchanges to be governed by a patchwork of state gaming laws. He also argued that the contracts are interstate financial instruments, matched and cleared across state lines, rather than products New York can regulate as local gambling activity.
New York sued Kalshi on July 31, after a federal judge rejected Kalshi’s effort to block the state from filing its case. The state alleged that Kalshi was violating New York gambling laws by offering sports prediction markets without a license from the New York State Gaming Commission.
The litigation is still moving through procedural steps. Kalshi has asked to move the case to federal court, while New York has asked to return it to state court, with both motions awaiting a judge’s decision. The CFTC has previously intervened in a similar dispute involving Kalshi in Michigan, underscoring that the regulatory conflict is not limited to one state.
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