NY judge denies CFTC motion in Kalshi enforcement fight
A New York federal judge denies CFTC motion for an emergency order that would have paused state enforcement against prediction market Kalshi. Judge Jed S. Rakoff rejected the request without prejudice, leaving New York’s case intact while the CFTC may renew it before Judge Victor Marrero on Aug. 7.
Key Takeaways
- Judge Jed S. Rakoff denied without prejudice the CFTC’s emergency bid for a temporary restraining order against New York’s Kalshi case.
- Rakoff found the CFTC had not shown a high likelihood of success on the merits or a likelihood of irreparable harm.
- New York’s enforcement action remains in place; the CFTC may renew its request before Judge Victor Marrero on Friday, Aug. 7.
- The dispute centers on whether federal commodities law preempts state gambling rules for event contracts on CFTC-regulated exchanges.
The decision leaves New York’s case against Kalshi in place while giving the CFTC another chance to seek a pause later this week. For more coverage of market regulation and prediction platforms, see BlasterPost’s Fintech & Crypto Alerts hub.
What did the judge decide on the CFTC motion?
According to Cointelegraph, Rakoff denied an emergency Commodity Futures Trading Commission request for a temporary restraining order. That order would have blocked New York from pursuing its enforcement case against prediction market operator Kalshi.
The denial was without prejudice. That means the CFTC can try again, and the reporting says it may renew the motion before Judge Victor Marrero on Friday, Aug. 7.
Rakoff found that the CFTC had not shown a high likelihood of success on the merits or a likelihood of irreparable harm.
Why does New York’s case against Kalshi matter?
New York Attorney General Letitia James sued Kalshi last Friday. The suit alleges Kalshi operates an illegal, unlicensed gambling business by offering contracts tied to sports, elections and other events.
Separately, the New York State Gaming Commission issued Kalshi a cease-and-desist order in October 2025. Those steps show New York treating certain event contracts as gambling subject to state rules, not solely as federal derivatives.
For Kalshi, the immediate effect of this ruling is continuity: New York’s case stays live after the CFTC’s first emergency bid to pause it failed.
How does this fit the federal-versus-state jurisdiction fight?
Cointelegraph describes the ruling as the latest development in a jurisdictional dispute. The core question is whether federal commodities law preempts state gambling enforcement against event contracts traded on CFTC-regulated exchanges.
State authorities argue the contracts are wagers under state gambling laws. The CFTC and Kalshi contend they are derivatives under the CFTC’s exclusive jurisdiction.
That clash is why the TRO denial matters: New York’s case continues for now, and the CFTC’s reported next chance to seek a pause is before Judge Marrero on Aug. 7.
What happens next for Kalshi and the CFTC?
Short term, New York’s enforcement path is not paused. The CFTC may renew its request before Judge Victor Marrero on Friday, Aug. 7, according to the order as reported.
Until then, the New York action remains active. Whether the CFTC renews before Marrero will be the next clear checkpoint on a federal pause of the state case.
BlasterPost will continue tracking this story in Fintech & Crypto Alerts as filings and rulings land.