Judge Torres denies Kalshi injunction in New York gambling dispute, same-day appeal filed
Judge Analisa Torres denied Kalshi's request for a preliminary injunction Tuesday night, ruling that New York gambling laws are not preempted by federal law and that Kalshi failed to show its sports markets were event contracts. Kalshi filed a same-day appeal to the Second Circuit to block state gambling enforcement against its CFTC-regulated sports event contracts. The ruling blocks Kalshi from offering the contracts in New York while the case proceeds.
Kalshi now fights parallel enforcement actions across six states without a federal shield. Torres's ruling cracks the preemption argument that CFTC registration alone bars state gambling laws. The Second Circuit appeal is Kalshi's last chance to reverse the ban before trial, but appellate review of preliminary injunction denials rarely succeeds.
Every state attorney general can cite this opinion to seek pre-merits bans while underlying cases drag on. Polymarket faces identical exposure; its CFTC registration offers no safe harbor if other judges follow Torres. The platforms must budget for market-by-market litigation or retreat from sports contracts entirely.
Kalshi and Polymarket now face escalating state-level scrutiny in Michigan, Illinois, Minnesota, Kentucky, New Mexico, and New York, with the CFTC suing Minnesota to block the nation's first felony prediction market ban serving as the sharpest federal-state collision to date.