The Commodity Futures Trading Commission has used its emergency authority to direct prediction market Kalshi to continue operating in New York, according to Protos. The order came after Kalshi told the CFTC that a pending state lawsuit had created a “market emergency.”
New York Attorney General Letitia James filed suit in July seeking a nationwide temporary restraining order against Kalshi and damages equal to three times its gains, a figure the CFTC says exceeds $36 billion. The lawsuit accuses Kalshi of running an illegal gambling operation without a license from the New York State Gaming Commission.
CFTC Chairman Michael S. Selig defended the action, saying Congress did not intend for derivatives exchanges to be regulated under a patchwork of state gaming laws. “New York has no business regulating these interstate financial markets,” he said. “The Commission is required by law to ensure order in these markets, and that is what we have done today.”
Kalshi and rival Polymarket both employ Trump family members as advisers and continue to fight regulatory court cases across the US. The New York lawsuit also has support from a coalition of American Indian tribes who argue Kalshi's operations undermine gaming laws on their land. Separately, Kalshi was sued in July by flight tracking service FlightAware over the unauthorized use of its data and brand for canceled flight markets.
