A U.S. federal judge has denied KalshiEX’s request for an emergency injunction while the company continues its appeal against New York regulators.
Judge Analisa Torres issued the ruling on July 27, rejecting Kalshi’s request for temporary protection from New York’s enforcement actions. The decision does not end Kalshi’s appeal or the broader lawsuit, but it means the company will not receive emergency relief from the district court while the legal battle continues.
Kalshi filed the appeal after Judge Torres ruled on July 7 that the Commodity Exchange Act likely does not override New York’s gambling laws when it comes to Kalshi’s sports-event prediction contracts.
To obtain an injunction during an appeal, a company must meet a higher legal standard than for a normal preliminary injunction. Judge Torres said Kalshi failed to satisfy the required factors, including showing a strong chance of success on appeal and proving that it would suffer irreparable harm without immediate relief.
Kalshi argued that it faced a difficult choice between violating New York law or complying with state regulations and potentially risking its federal registration. However, the judge said those concerns were largely speculative and that most of the potential losses involved financial costs, which generally do not qualify as irreparable harm.
The company also pointed to a proposed rule from the Commodity Futures Trading Commission (CFTC) that suggests federal law should take priority over state laws regulating transactions on federally registered exchanges.
Judge Torres acknowledged the proposal but said courts must interpret federal law independently. She maintained her previous position that the Commodity Exchange Act does not automatically override all state gambling laws that may apply to certain trading activities.
Kalshi has also asked the U.S. Court of Appeals for the Second Circuit for emergency relief. That request remains pending, and the appeals court has not yet issued a decision.
The case is part of a growing legal debate over prediction markets in the United States. Different courts have reached different conclusions on whether states can regulate contracts offered by federally registered prediction-market platforms.
Earlier this year, a federal appeals court ruled that New Jersey could not regulate Kalshi’s sports-event contracts because they fell under federal oversight. However, courts in New York and some other states have taken a different view, creating uncertainty about how prediction markets will be regulated nationwide.
For now, Kalshi’s appeal continues, and the next major development will be the Second Circuit’s decision on its request for emergency relief. The broader legal fight over state versus federal authority in prediction markets remains unresolved.
