Prediction market Kalshi has filed a lawsuit in opposition to the New York State Gaming Fee within the US District Court docket for the Southern District of New York, asking the court docket for a “everlasting injunction and declaratory aid.” It comes because it filed a short response opposing Nevada regulators’ request for an emergency evaluate of their effort to raise a preliminary injunction.
In accordance with the grievance filed on Monday (October 27), “This motion challenges the State of New York’s intrusion into the federal authorities’s unique authority to manage derivatives buying and selling on exchanges overseen by the Commodity Futures Buying and selling Fee (‘CFTC’).”
I suppose we’re simply submitting lawsuits on weekends now. Kalshi information a preemption swimsuit in opposition to New York. pic.twitter.com/wAKyeWD5c3
— Andrew Kim (@akhoya87) October 27, 2025
Kalshi receives cease-and-desist letter from New York Gaming Fee
Kalshi argues that the New York State Gaming Fee “seeks to forestall Plaintiff KalshiEX LLC (‘Kalshi’) from providing occasion contracts for buying and selling on its federally regulated trade” and “does so by threatening Kalshi with imminent civil penalties and fines for providing these contracts.”
The dispute stems from a cease-and-desist letter the Gaming Fee despatched to Kalshi on Friday (October 24), claiming that providing occasion contracts based mostly on sporting occasions going down in New York State with out a sports activities gaming license would violate state regulation. The letter directed Kalshi to “stop and desist instantly from illegally promoting, selling, administering, managing, or in any other case making out there sports activities wagering and/or a cellular sports activities wagering platform in New York.”
The Gaming Fee additionally warned that it was empowered to “levy and accumulate civil penalties and fines for any violation of the Racing Legislation.” It recognized 20 of Kalshi’s federally self-certified occasion contracts as illegal and “demanded Kalshi stop and desist operations and with out offering a compliance date.”
The fee confirmed to ReadWrite that it had despatched the letter, offering us with a replica. It said: “Kalshi will not be licensed by the Fee to supply a platform for sports activities wagering in New York, both at a on line casino or as a cellular sports activities wagering operator.
“The Fee reserves all rights to research additional and to levy and accumulate
civil penalties and fines in reference to Kalshi’s prior, present, and any future exercise associated to sports activities wagering and/or cellular sports activities wagering in New York.”
Federal vs state laws
Kalshi’s grievance argues that the fee’s enforcement actions would put the corporate in battle with each federal and state laws. “Kalshi has no choice however to hunt judicial aid,” the corporate wrote, citing the cease-and-desist letter that “calls for that Kalshi instantly stop working in New York or face legal and civil legal responsibility.”
The corporate stated that, as a result of its platform “listed contracts that have been [to] be traded over the weekend,” it had “no different sensible alternative to guard its business pursuits and people of its customers besides to deliver this swimsuit.” It warned that, “Absent judicial aid, Kalshi faces the prospect of legal enforcement and civil penalties in New York as of the date of this submitting.”
The grievance presents the difficulty as a matter of federal preemption, arguing that solely the Commodity Futures Buying and selling Fee has the authority to manage Kalshi’s occasion contract market, not state gaming regulators.
A spokesperson from the corporate informed ReadWrite: “The threatened actions from the New York Gaming Fee search to undermine not simply Kalshi’s contracts, however the authority granted by Congress to the Commodity Futures Buying and selling Fee, which has safely and successfully ruled commodities markets for many years.
“Prediction markets are a essential innovation of the twenty first century, and like all improvements, they’re initially misunderstood. We’re proud to be the corporate that has pioneered this know-how and stand able to defend it in a court docket of regulation.”
Kalshi has already filed federal lawsuits in Maryland, Nevada, New Jersey, and Ohio to cease state enforcement actions. Massachusetts has additionally filed its personal state court docket case to dam Kalshi from providing sports activities occasion contracts there.
UPDATED: Assertion from Kalshi and letter from New York State Gaming Fee have been included on October 27, 2025.
Featured picture: Kalshi / Canva
The publish Kalshi sues New York Gaming Fee over federal regulatory authority dispute appeared first on ReadWrite.
