Kalshi’s court loss shows federal approval may still leave prediction markets fenced off by states
A New York federal court denied Kalshi’s request for a preliminary injunction, allowing New York to keep enforcing its gambling law against Kalshi’s sports-event contracts while the case continues. The ruling is only provisional and does not decide the merits, but it rejects Kalshi’s claim that federal commodities law preempts state gambling law here. The decision comes just before the CFTC’s July 27 comment deadline on proposed rules for event contracts, including contracts tied to gaming or unlawful activity. The court also rejected the argument that CFTC impartial-access rules require nationwide access, and it treated state-by-state geofencing costs as normal compliance burdens rather than irreparable harm. The practical result is that prediction markets may gain federal recognition while still facing state-by-state access limits, delays, or redesign requirements.
