Kalshi Sues New York to Protect Sports Prediction Markets Amid Regulatory Clash
KalshiEX LLC, a federally regulated derivatives exchange, has filed a lawsuit against New York State Gaming Commission executive director Robert Williams in the U.S. District Court for the Southern District of New York. The legal challenge comes after state regulators issued a cease-and-desist letter on October 24, 2025, demanding the shutdown of Kalshi's sports prediction markets for allegedly violating state gambling laws.
The Manhattan-based exchange argues its CFTC designation as a contract market in 2020 grants federal preemption over state gambling oversight. Kalshi's complaint contends New York's enforcement actions violate the Supremacy Clause, creating a direct conflict between federal derivatives regulation and state gaming authority. The case could set important precedents for jurisdictional boundaries in emerging prediction markets.
