The Commodity Futures Trading Commission ordered KalshiEX to keep operating on Aug. 11, using emergency authority after New York’s attorney general sued the prediction-market platform in state court. The commission said Kalshi must continue to operate in line with the Commodity Exchange Act’s Core Principles, and framed the move as a response to a market emergency.
As reported in July, New York had already gone to court against Kalshi, accusing it of running an illegal gambling operation through its prediction-market business. The state’s complaint, filed on July 31, sought to stop the company from offering event contracts nationwide, as well as restitution, penalties and more than $36 billion in damages.
New York’s governor and attorney general said their investigation found that Kalshi was operating without a state gaming licence and sidestepping the taxes and other obligations that apply to licensed casinos and mobile sports-betting platforms. They also said the company’s markets were available to users aged 18 to 20, even though New York requires people to be at least 21 to take part in mobile sports betting.
The state argued that Kalshi’s contracts meet the legal definition of gambling because the outcomes are uncertain and outside the bettor’s control, or depend on chance. Governor Kathy Hochul said the company had chosen to ignore New York’s gaming laws, while Letitia James said prediction markets like Kalshi are “gambling platforms, plain and simple.”
The CFTC said the Commodity Exchange Act requires a uniform national market in derivatives transactions, and warned that major disruptions can undermine public confidence, resilience and orderly trading. Chairman Michael Selig said Congress did not intend derivatives exchanges to be governed by a patchwork of state gaming laws, and accused New York of trying to make event-contract derivatives “waste away” before the courts issue final rulings.
The CFTC said it has filed suits against Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island and Wisconsin to protect its jurisdiction over CFTC-regulated designated contract markets. In a June proposal published in the Federal Register, the commission said trading volume across CFTC-registered prediction markets exceeded $25 billion in 2025, and described the market as growing quickly in importance.
