Judge rejects Kalshi’s bid to block New York gambling enforcement in Manhattan

US District Judge Analisa Torres has denied Kalshi’s motion for a preliminary injunction, leaving New York free to enforce its gambling laws against the prediction platform operator. For high-risk payments players, the immediate takeaway is simple: if a product is being treated as gambling by state authorities, the legal wrapper around it can matter a lot less than the underlying contract.

1. Torres ruled in Manhattan that the federal Commodity Exchange Act does not supersede New York’s gambling laws as applied to Kalshi’s sports-event contracts. That is the core issue here: Kalshi wanted federal law to preempt state gambling enforcement, and the court said no.
2. In her ruling, Torres said New York’s interests in preventing gambling addiction, preserving sports’ integrity and avoiding a proliferation of unregulated contracts “heavily” outweigh Kalshi’s interests in ensuring the primacy of federal law. For PSPs and acquirers, that is the kind of language compliance teams tend to underline in red, because it signals how a court is framing the product.
3. Governor Kathy Hochul and New York Attorney General Letitia James welcomed the ruling in a joint statement, saying: “New York’s gambling laws are designed to protect consumers. Kalshi tried to ignore them. Yesterday, they lost in court. We will continue to hold all gambling platforms accountable to the law — and that includes prediction markets.”
4. Kalshi’s problems are not limited to New York. Michigan Attorney General Dana Nessel has secured a temporary restraining order in the Ingham County Circuit Court preventing Kalshi from offering or advertising online sports wagers in the state.

The thing is, for payments providers the legal label on a contract is not just academic. When state regulators and courts start treating prediction products as gambling, the practical questions become familiar fast: who is the merchant of record, what exactly is being sold, and which jurisdictions are prepared to shut the door.