Judge Torres denies Kalshi New York injunction, company appeals to Second Circuit
Federal Judge Analisa Torres denied Kalshi's request for a preliminary injunction to block New York state gambling enforcement against its sports-event contracts. Torres ruled July 7 that the Commodity Exchange Act does not preempt New York gambling laws as applied to Kalshi's contracts. Kalshi immediately appealed to the Second Circuit. The New York State Gaming Commission had ordered Kalshi to stop offering unlicensed sports event contracts.
The ruling cracks Kalshi's core legal strategy of relying on CFTC registration to preempt state gambling laws. Torres found the federal statute does not shield Kalshi from New York enforcement, so the platform must now fight market-by-market instead of winning once federally. Each state victory invites copycat actions, multiplying legal budgets and forcing geofencing decisions.
The Second Circuit appeal is Kalshi's last chance to restore a uniform federal shield before more states follow New York's lead. For Polymarket, the identical exposure means the appellate outcome is a shared survival event: a loss there accelerates the patchwork both platforms must navigate.
Joins Michigan as the second state to successfully block Kalshi's sports contracts on pre-merits grounds, extending a playbook that now threatens both platforms across Illinois, Minnesota, Kentucky, and New Mexico.