Kalshi Challenges New York Regulators Over Sports Prediction Markets

Event-contract platform Kalshi has initiated a federal lawsuit against New York regulators, aiming to prevent the state's gaming commission from classifying its sports prediction markets as illegal gambling. The MOVE follows a cease-and-desist letter from the New York State Gaming Commission, which threatened civil penalties if Kalshi continued offering sports-event contracts.

The lawsuit argues that federal law supersedes state gambling regulations for contracts traded on platforms regulated by the Commodity Futures Trading Commission. This legal action mirrors a recent case involving Crypto.com, which faced a similar challenge in Nevada but was denied an injunction by Judge Andrew P. Gordon—the same judge who previously ruled in Kalshi's favor.

Kalshi's proactive stance highlights the growing tension between innovative financial platforms and traditional regulatory frameworks. The outcome could set a precedent for how prediction markets and crypto-related ventures navigate state-level restrictions.