Kalshi appeals New York court loss in sports prediction market fight
Kalshi is appealing a New York court loss over its sports prediction market offerings. Judge Torres denied the platform's request for an injunction, letting New York enforce gaming statutes while litigation continues. The appeal centers on whether CFTC registration preempts state gambling restrictions on sports-linked event contracts. Wisconsin sued Robinhood, Coinbase, Polymarket, Crypto.com, and Kalshi in April over similar sports markets.
Judge Torres's ruling strips Kalshi of its federal preemption defense across every active state case. New York can now enforce gaming statutes while litigation proceeds. Connecticut Attorney General William Tong has already signaled he will use Torres's decision to guide similar cases. Kalshi's Second Circuit appeal faces long odds on preliminary relief.
The platform must now prepare for market-by-market enforcement and potential geofencing rather than one clean federal win. Every state victory emboldens copycat statutes and stretches Kalshi's legal budget across multiple fronts. Polymarket faces identical exposure as the preemption shield cracks.
Kalshi joins Polymarket in a three-front fight against the Senate's bipartisan bill to ban sports event contracts, state enforcement actions from New York and Washington, and the CFTC's own rulemaking — each channel threatening the sports revenue that drove record volume for both platforms.