Judge Analisa Torres denies Kalshi injunction in New York

U.S. District Judge Analisa Torres denied Kalshi’s request for a preliminary injunction in KalshiEX LLC v. Williams, ruling that New York’s gambling laws, as applied to Kalshi’s sports event contracts, are not preempted by the Commodity Exchange Act. The exchange filed the case in the Southern District of New York on Oct. 27, 2025.

The New York State Gaming Commission had issued a cease-and-desist order directing Kalshi to stop offering sports-based event contracts to New Yorkers without a sports wagering license. New York paused enforcement while Kalshi sought the injunction.

Torres found at the preliminary stage that federal commodities law does not displace the state’s gambling statutes for Kalshi’s products. She declined to grant interim federal protection and allowed the lawsuit to proceed to the motion-to-dismiss phase. The judge did not resolve the underlying merits of Kalshi’s preemption claim.

Kalshi had argued that its contracts trade on an exchange overseen by the Commodity Futures Trading Commission and therefore fall under exclusive federal jurisdiction. Torres rejected that argument for the purposes of injunctive relief. Kalshi can pursue the case on the merits in district court or seek appellate review.

The ruling differs from a Third Circuit decision in April 2026 that blocked New Jersey regulators from enforcing state gaming law against Kalshi on likely exclusive CFTC jurisdiction grounds. Maryland courts previously denied Kalshi comparable relief. Torres’ decision adds New York to the list of outcomes where preemption arguments have not succeeded.

Gaming law attorney Daniel Wallach called the decision “a major, major loss” and said it could affect Kalshi’s other pending suits, including litigation in Connecticut.

Kalshi reported a record $31 billion in trading volume in June, driven largely by World Cup-related activity. Industry data showed monthly taker volume for the prediction market sector at $8.6 billion in April, and Kalshi has surpassed rival Polymarket in volume. Several states have increased enforcement and raised criminal penalties for unlicensed sports wagering.

The next procedural step is consideration of Kalshi’s complaint on a motion to dismiss. Without a preliminary injunction, New York regulators may enforce state law while the case is decided, and Kalshi retains the option to continue pursuing federal preemption arguments and to appeal adverse rulings.