CFTC Orders Kalshi to Remain Operational Amid New York Lawsuit

The Commodity Futures Trading Commission (CFTC) invoked its emergency authority to direct prediction-market platform Kalshi to continue operating despite a lawsuit filed by New York Attorney General Letitia James on July 31 seeking a temporary nationwide ban on Kalshi’s event-contract business. The CFTC’s order follows a federal judge’s earlier denial of Kalshi’s request to stay the state enforcement action, which alleges the platform runs an “unlicensed gambling operation.”

Common Dreams

Kalshi offers contracts that let users trade on real-world outcomes, a model state regulators label as disguised sports betting. The CFTC, led by Trump-appointed Chair Michael Selig, argues that the Commodity Exchange Act (Commodities Exchange Act (CEA)) grants it exclusive jurisdiction over derivatives markets and that federal law preempts state attempts to regulate such “interstate financial markets.” In response, the commission has filed lawsuits against nine states—Arizona, Connecticut, Illinois, Kentucky, Minnesota, New York, Rhode Island, Wisconsin, and New Mexico—and submitted amicus briefs supporting platforms facing state actions.

CFTC Orders Kalshi to Keep Operating Despite New York Ban

President Donald Trump publicly backed the CFTC, describing state officials opposing prediction markets as “SCUM.”

CFTC Orders Kalshi to Keep Operating Despite New York Ban

During the FIFA World Cup, trading volume on prediction-market platforms rose by 75 %, highlighting the growing user interest that the CFTC cites as justification for maintaining a uniform national market.

CFTC Orders Kalshi to Keep Operating Despite New York Ban

• “Now that New York has sued Kalshi to prevent it from circumventing state gambling laws, the CFTC has directed Kalshi to continue to operate even if a court enjoins it from doing so,” — Benjamin Schiffrin, director of securities policy for the advocacy group Better Markets

Common Dreams

• “New York has no business regulating these interstate financial markets,” — CFTC Chair Michael Selig, trump-appointed chairman

CFTC Orders Kalshi to Keep Operating Despite New York Ban