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A federal judge in the Southern District of New York has denied KalshiEX LLC’s request for a preliminary injunction that would have stopped the New York State Gaming Commission from enforcing state gambling laws against the company’s sports-related event contracts.
The July 7 decision in _KalshiEX LLC v. Williams_ leaves Kalshi without immediate court protection in New York while the case continues. The court also dismissed the gaming commission itself as a defendant on Eleventh Amendment immunity grounds, though the case proceeded against the individual commissioners in their official capacities.
Kalshi is registered with the Commodity Futures Trading Commission as a designated contract market. According to the source article, the company self-certified and began listing sports-related event contracts in January 2025. New York law, meanwhile, requires a license from the state gaming commission to offer sports wagering. The commission sent Kalshi a cease-and-desist letter in October 2025.
On the core legal issue, the court held that New York’s gambling laws are not preempted by the Commodity Exchange Act as applied to prediction markets. The judge also found no irreparable harm and said the balance of equities and public interest weighed against granting an injunction.
For readers following prediction markets, the ruling is another sign that state-level gambling enforcement remains a live risk even when an operator points to federal commodities regulation. The source article also notes that courts remain divided on whether Kalshi’s sports-event contracts qualify as swaps under the Commodity Exchange Act.
What comes next is less clear. The source notes pending CFTC rulemaking on how the agency’s Special Rule may apply to prediction-market event contracts, and that broader federal guidance could matter for operators and state regulators alike. The article does not say whether Kalshi has appealed the SDNY ruling.
For Florida readers, the immediate case is about New York, not Florida. But it is still relevant because it underscores a national unresolved question: how far state gambling regulators can go in policing sports-related prediction markets while federal oversight and court treatment remain unsettled.
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Source: As reported by mondaq.com.
