New York AG asks federal court to disregard CFTC emergency order to Kalshi
New York Attorney General James asked a federal court on Monday, Aug. 31 to disregard a CFTC emergency order related to Kalshi. A letter filed in federal court accused the CFTC of using a rare emergency order to advance Kalshi's agenda in courts across the country. The state disputes the validity of the CFTC's denial of Kalshi's emergency rule change for consideration in the agency's lawsuit against the state. The filing marks the latest clash between the state and the prediction markets industry over the legal status of event contracts.
The New York filing tightens the vice on Kalshi's federal shield. The Ninth Circuit already forced Kalshi to geofence Nevada. Connecticut sued a day earlier. Each state loss emboldens the next attorney general to file. Kalshi must now defend parallel cases on both coasts while its legal spend compounds.
Traders hold open positions whose validity shifts with state borders, not federal rules. Polymarket faces identical exposure because the reasoning reaches any venue offering sports-linked contracts. A geofence cascade would fragment liquidity before any Supreme Court ruling lands, pushing volume toward platforms with stronger state gambling licenses or narrower sports menus.
New York is the third state attorney general in two days to challenge Kalshi's federal shield, joining Connecticut's suit and Nevada's enforcement win that the Ninth Circuit affirmed.