New York ruling keeps state limits in play for prediction markets

Federal approval may not be enough for prediction market platforms to reach all U.S. users. A New York federal court has denied Kalshi's request for a preliminary injunction, allowing state officials to keep enforcing New York gambling law against its sports-event contracts while the case continues.

Judge Analisa Torres did not decide the full case, but she rejected Kalshi's argument for immediate relief. The company had said the Commodity Exchange Act overrides New York's gambling rules for these contracts. The court was not persuaded, and also said the cost of geolocating users by state looks like a normal compliance burden, not irreparable harm.

That matters because the CFTC is still taking comments, through July 27, on proposed national rules for event contracts. The agency's June proposal covers public-interest reviews for contracts tied to gaming or other activity that may be unlawful under federal or state law. The ruling sharpens the risk that a federal listing process could still leave platforms dealing with local access restrictions.

The issue already reaches beyond Kalshi. Crypto.com offers CFTC-regulated sports-event trading, Coinbase says its prediction markets are unavailable in Nevada, and Gemini Titan and Polymarket US are tied to CFTC-designated contract market status. For now, state-by-state geofencing and product changes remain on the table.