Kalshi Loses Preliminary Injunction Bid in New York Sports Event Contracts Case

KalshiEX LLC has failed to secure a preliminary injunction blocking New York gaming regulators from applying state gambling laws to its sports-event contracts, marking a setback for the exchange in one of the key state-level fights over prediction markets.

The case, KalshiEX LLC v. Williams, is being heard in the Southern District of New York before Judge Analisa Torres. The litigation record shows that Judge Torres denied Kalshi’s request for preliminary injunction on July 7, 2026.

Kalshi sued New York gaming officials in October 2025 after the New York State Gaming Commission sent the company a cease-and-desist letter. In later federal filings, the CFTC described the letter as accusing Kalshi of offering event contracts based on sporting events in New York without a sports gaming license, and ordering the company to stop making sports wagering or mobile sports wagering available in the state.

Kalshi’s complaint argued that it operates as a federally designated contract market under the Commodity Exchange Act, and that its event contracts, including sports event contracts, fall under the CFTC’s exclusive jurisdiction. The company asked the court for declaratory and injunctive relief, arguing that New York’s attempted enforcement was preempted by federal law.

The exchange also argued that being forced to shut off New York access would cause irreparable harm, including disruption to existing contracts, customer relationships, market access, and the operation of its federally regulated exchange. Kalshi said it would also need to implement geolocation and compliance systems to exclude New York users.

The dispute sits alongside a broader federal challenge brought by the CFTC and the United States against New York. In that case, federal plaintiffs argue that New York is attempting to regulate or criminalize event contracts that are traded on CFTC-regulated exchanges, creating a conflict between state gambling enforcement and the federal derivatives regime.

New York’s position, as described in the CFTC filing, is that sports-linked event contracts made available in the state can fall within New York’s sports wagering and gambling laws. The CFTC counters that qualifying event contracts traded on designated contract markets are derivative instruments subject to federal oversight.

The denial of a preliminary injunction does not end Kalshi’s case or decide every question on the merits. But it means Kalshi did not obtain the interim court order it sought to stop New York enforcement while the litigation proceeds.

For prediction markets, the case keeps the central legal question alive: whether sports event contracts listed on federally regulated exchanges can be treated as state-regulated gambling products when offered to users in states such as New York.