Judge Torres rules New York can block Kalshi's sports gambling contracts
A federal judge ruled that New York may enforce its gaming laws against Kalshi's sports event contracts, rejecting the prediction market's argument that CFTC registration preempts state authority. Kalshi began listing sports contracts in January 2025, covering events including NCAA basketball and the US Open golf tournament. The company has appealed to the Second Circuit. The ruling leaves Kalshi exposed to state enforcement while litigation continues.
Torres's ruling guts the preemption defense Kalshi has relied on in every active state fight. New York can now ban sports contracts outright while the appeal runs, and other state attorneys general will copy this playbook. Connecticut Attorney General William Tong has already said he will use Torres's opinion to guide similar cases.
The Second Circuit appeal offers slim hope for quick relief, so Kalshi must shift from seeking one federal win to fighting market-by-market bans with separate legal teams and potential geofencing. Each state victory cracks the shield wider for Polymarket too, which faces identical exposure. Legal budgets that were built for a single preemption case now stretch across multiple fronts with no clear end point.