Kalshi has received an unfavorable ruling in its lawsuit against the New York State Gaming Commission (NYSGC) over the delivery of sports event contracts.
According to court documents filed in the U.S. District Court for the Southern District of New York, Judge Analisa Torres denied a motion on Tuesday for a preliminary injunction filed by Kalshi last year.
Kalshi had filed a motion for a preliminary injunction in October 2025, along with an emergency temporary restraining order (TRO), to allow the prediction market to continue offering sports event contracts across the state.
Kalshi initiated legal proceedings against the NYSGC after receiving a cease-and-desist order from the regulator in 2025 for violating state gaming laws by offering sports event contracts in the state without a gaming license. The cease-and-desist order required Kalshi to stop “advertising, promoting, administering, managing or otherwise making available sports wagering and/or a mobile sports wagering platform in New York”.
Why did Torres rule against Kalshi?
The prediction market is suing the NYSGC and its leadership for “intrusion into the federal government’s exclusivity authority” to regulate event contract trading. The company argues that its event contracts receive oversight from the Commodity Futures Trading Commission (CFTC) under the purview of the Commodity Exchange Act (CEA).
The CEA provides the CFTC with exclusive authority to regulate event contracts, but that argument was quickly shut down by Torres in her ruling to deny Kalshi’s injunction.
“Kalshi has not shown that it is impossible to comply with both New York gambling laws and the CEA,” said Torres in her ruling. “There is nothing preventing Kalshi from obtaining a license pursuant to New York law and establishing a category of New York market participants that does not discriminate within that New York-resident category.”
Torres also noted that Kalshi’s argument for a preliminary injunction fell short after the prediction market failed to establish that it is “likely to succeed on the merits” and that it would suffer irreparable harm without preliminary relief. In response, Kalshi argued that it would face the threat of civil and criminal enforcement by the NYSGC without an injunction, and that its operations would be disrupted by the costs of geolocating users across the Empire State.
“Although the prospect of being subject to criminal prosecution could demonstrate a showing of irreparable injury, Kalshi’s harms ‘are largely monetary,’” said Torres. “As defendants contend, any civil fines that may be levied against Kalshi can be challenged and vacated if Kalshi ultimately prevails on the merits, which, as stated above, is unlikely.”
New York Gov. Kathy Hochul chimes in
Torres’ ruling received immediate support from two key New York officials.
“New York’s gambling laws are designed to protect consumers. Kalshi tried to ignore them. Yesterday, they lost in court,” said New York Gov. Kathy Hochul and State Attorney General Letitia James in a joint statement on Wednesday. “We will continue to hold all gambling platforms accountable to the law — and that includes prediction markets.”
SBC Americas has reached out to Kalshi for comment on the denied preliminary injunction.
Kalshi immediately responds to New York court ruling
Kalshi wasted no time in responding to Torres’ ruling by filing an appeal on Tuesday in the U.S. Court of Appeals for the Second Circuit. The appeal adds to the growing list of active legal proceedings Kalshi has in courts across North America.
Last month, a Michigan judge granted a temporary restraining order against Kalshi filed by State Attorney General Dana Nessel. The order prevented Kalshi from offering sports events in the Wolverine State and required the prediction market to leverage a third-party geolocation service to prevent Michigan users from accessing sports event contracts during the 14-day order period. According to a report from The Event Horizon, Kalshi faced fines of up to $120,000 per day if it failed to comply with the geolocation mandate.
Meanwhile, Kalshi sued the Ohio Casino Control Commission (OCCC) on June 29 to block a $5 million fine levied by the regulator against the company. The lawsuit comes after the OCCC announced plans in April to fine Kalshi for offering unlicensed sports betting.
Kalshi’s latest legal proceedings also include a lawsuit filed by New Mexico Attorney General Raúl Torrez. The AG claims that Kalshi “plays the same role as a traditional sportsbook” without holding a gaming license from New Mexico’s gaming regulator. Torrez also takes issue with Kalshi offering trading to consumers aged 18 to 20 years old.
The latest ruling in New York has the potential to impact Kalshi’s legal proceedings in courts outside the state. Kalshi is also facing suits from government officials in Arizona, Kentucky, Massachusetts, Nevada and Washington. Arizona was the first state to file a criminal complaint. In April, an Arizona judge denied Kalshi’s motion for a TRO and preliminary injunction against the state regarding its delivery of sports event contracts.
