Judge Analisa Torres of the Southern District of New York denied Kalshi’s request for a preliminary injunction, holding that New York gambling laws governing the company’s sports-event contracts are not preempted by the Commodity Exchange Act. With the injunction request rejected, the dispute now moves into the motion-to-dismiss stage.
According to the court’s ruling, Kalshi did not show it was likely to succeed on the merits of its claim. The company had argued that federal commodities law displaced New York’s authority to regulate the contracts at issue. Torres rejected that argument, pointing instead to the longstanding view that gambling regulation falls within the states’ police powers. That led the court to apply a presumption against federal preemption.
State gambling authority remains intact under the federal framework
Torres wrote that the Commodity Exchange Act does not completely displace state authority. In the court’s reading, Congress left room for states to regulate certain conduct even when the activity also sits within a federal statutory structure. The ruling highlighted Section 2 of the Commodity Exchange Act, noting that while the law gives the Commodity Futures Trading Commission exclusive jurisdiction in some areas, it also preserves powers already granted to state regulators.
The court also focused on the Act’s special rule for event contracts. Torres said that provision allows the CFTC to prohibit contracts tied to unlawful activity or gaming when they conflict with state or federal law. For the court, that language showed Congress expected state gambling laws to continue operating alongside federal oversight, not to be swept aside.
Earlier Kalshi cases in Maryland and Ohio were cited
The decision referenced prior rulings from Maryland and Ohio involving Kalshi. Those cases reached a similar conclusion: state gambling laws still matter within the broader federal regulatory scheme. The New York ruling places the current dispute in line with that developing pattern.
Kalshi also claimed that complying with New York law would conflict with the CFTC’s impartial access requirement. Torres disagreed. She wrote that the requirement bars discriminatory access to a platform, but it does not compel an exchange to list contracts nationwide. The court added that Kalshi could seek a New York license and establish a separate category for state residents without violating federal rules. Court filings highlighted by Daniel Wallach and journalist Eleanor Terrett show the litigation will now continue at the motion-to-dismiss stage.