Judge Analisa Torres, best known for the SEC v. Ripple ruling, has denied Kalshi’s bid for a preliminary injunction against New York gaming regulators, finding the state’s gambling laws are not preempted by federal commodities law.
Key Takeaways
Judge Torres denied Kalshi’s injunction, ruling NY gambling laws aren’t preempted by the Commodity Exchange Act.The decision breaks with the Third Circuit’s April 2026 ruling that shielded Kalshi from New Jersey regulators.Kalshi posted a record $31 billion in June volume, raising the stakes as the case heads to motion-to-dismiss.The denial allows the case to proceed to the motion-to-dismiss stage, leaving the exchange without the legal shield it has won in several other states. Gaming law attorney Daniel Wallach described the outcome bluntly, calling it “a major, major loss.” He added that the ruling could carry implications for Kalshi’s other pending cases, including in Connecticut.
The Ripple Judge Takes on Prediction MarketsKalshi argued that its contracts trade on a federally designated exchange overseen exclusively by the Commodity Futures Trading Commission (CFTC), placing them beyond state regulators’ reach. New York agreed not to enforce the order while the injunction motion was pending.
Torres was unpersuaded that federal law displaces the state’s gambling statutes at this stage. That finding does not end the case and Kalshi can still prevail on the merits or appeal. However, it strips the exchange of interim protection and hands state regulators their most significant courtroom win yet in the Second Circuit.
