A US federal judge has refused Kalshi's bid to block New York from enforcing its state gambling laws against the prediction market operator's sports-event contracts. The ruling matters because it is one of several cases testing whether federal oversight of prediction markets overrides state gambling rules, and it lets New York keep enforcing its laws while the wider lawsuit continues.

District Judge Analisa Torres found that Kalshi's registration with the Commodity Futures Trading Commission does not exempt it from state gambling regulation, and that federal inaction does not block state laws. She held that gambling has traditionally been a matter for states and that Congress showed no clear intent to preempt New York's authority. The dispute began in October 2025 when New York's Gaming Commission ordered Kalshi to stop offering sports wagering; officials argue unsupervised betting would harm residents, especially those aged 18 to 24. Kalshi maintains its contracts are federally regulated swaps and is appealing to the 2nd Circuit.