CFTC orders Kalshi to continue offering prediction markets in New York after state lawsuit
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Summary
The U.S. Commodity Futures Trading Commission (CFTC) has ordered prediction market operator Kalshi to continue its operations in New York after the state filed a lawsuit seeking to shut down the platform. The CFTC used its emergency authority to require Kalshi to remain open following New York State Attorney General Letitia James’ lawsuit alleging Kalshi violated state gambling laws by offering sports prediction markets.
Why it matters
This development highlights the ongoing regulatory conflict between the federal CFTC and state authorities over the jurisdiction of prediction markets. The CFTC asserts federal authority over these markets as financial exchanges offering derivatives, while New York and other states view some prediction markets as gambling platforms subject to state gaming laws. The dispute raises questions about regulatory oversight of prediction markets crossing state lines.
Key context
Kalshi was sued by New York on July 31 after a federal judge denied an injunction against the state’s lawsuit. New York contends Kalshi operates without a license from the New York State Gaming Commission and avoids taxes that fund public school programs and gambling-related education. Previously, the CFTC took action to support Kalshi in Michigan, although Kalshi had to cease certain trades after a state court ruling there.
Key numbers and entities
The principal entities involved are the U.S. Commodity Futures Trading Commission led by Chairman Mike Selig, prediction market operator Kalshi, and New York State Attorney General Letitia James. The lawsuit against Kalshi was filed on July 31. No specific financial figures or stock tickers are mentioned.
What remains unclear
The source does not clarify the timeline for judicial decisions on the pending motions to transfer the case between federal and state courts. It also does not specify how the emergency order from the CFTC will interact with ongoing state-level legal proceedings or what the final resolution may be.