The Trump administration’s derivatives regulator has ordered prediction-market operator Kalshi to continue operating in New York, attempting to prevent the state from enforcing gambling laws against it. The dispute matters because it tests whether federally regulated prediction markets should be treated as nationwide financial exchanges or as gambling services subject to individual state rules.

New York Attorney General Letitia James sued Kalshi on 31 July, alleging it runs an unlicensed gambling business and seeking an injunction, customer restitution and penalties. The Commodity Futures Trading Commission said its emergency action was needed for market stability and argued it has exclusive authority over such exchanges, while New York says Kalshi has avoided licensing and taxes that support public services; a federal judge had previously declined to block state enforcement, and Kalshi has appealed.