Kalshi Challenges New York’s Attempt to Halt Sports Prediction Markets
Kalshi, a federally regulated derivatives exchange, has filed a lawsuit against New York state regulators to prevent the shutdown of its sports event contracts. The legal action, lodged in the Southern District of New York, contends that the state's enforcement efforts violate federal derivatives trading laws under CFTC jurisdiction.
The dispute centers on a cease-and-desist letter issued by New York's Gaming Commission on October 2, which claims Kalshi's markets constitute illegal gambling. Kalshi argues its contracts fall under commodity futures regulations, protected by constitutional supremacy clauses against state interference.
Market observers note the case could set precedents for prediction markets' legal status nationwide. A ruling favoring New York might force Kalshi to restructure operations, while a win for the exchange could embolden similar platforms to expand event-based derivatives offerings.
