New York Kalshi Lawsuit Escalates as AG Rejects CFTC Shield

New York’s fight to keep Kalshi out of its sports betting market just collided head-on with federal power, and the state isn’t backing down. The Kalshi New York lawsuit has escalated into a full-blown jurisdictional clash after the state’s attorney general pushed back hard against the prediction market operator’s latest legal maneuver, telling a federal appeals court that Kalshi cannot hide behind a regulatory order to dodge state law.

Key takeaways

• New York’s attorney general rejected Kalshi’s attempt to use a CFTC order as a shield against the state’s lawsuit.
• The AG told the 2nd Circuit that the CFTC cannot “manufacture a conflict” or rely on an “incorrect view” of federal statutes to claim exclusive jurisdiction.
• New York sued Kalshi on July 31 after a federal judge rejected the company’s bid to block the state from filing suit.
• The state alleges Kalshi has skipped New York State Gaming Commission licensing and the taxes that come with it.
• The CFTC has invoked emergency authority to order Kalshi to keep operating in New York while the legal fight plays out.

New York Attorney General Challenges Kalshi’s Use of CFTC Order in Lawsuit

New York’s top law enforcement official is not letting a federal regulator’s order settle a dispute she considers a matter of state law. The attorney general’s office argued that Kalshi cannot lean on a CFTC directive to insulate itself from accountability under New York’s gambling statutes, setting up a direct test of how far federal financial regulation can reach into state-level gaming enforcement.

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