Kalshi Challenges New York’s Gambling Classification in Federal Court
- Kalshi filed a federal lawsuit against New York regulators on October 27, seeking to prevent the state from classifying its sports prediction markets as illegal gambling.
- The lawsuit follows an October 24 cease-and-desist letter from the New York State Gaming Commission threatening civil penalties if Kalshi did not halt its sports-event contracts.
- U.S. District Judge Andrew P. Gordon, who previously ruled in favor of Kalshi in Nevada, denied Crypto.com’s injunction request in a similar case.
- Kalshi argues that federal law preempts state regulations for contracts traded on platforms regulated by the Commodity Futures Trading Commission (CFTC).
Kalshi has taken proactive legal action against New York’s gaming commission to assert that federal law should govern its operations, not state gambling laws. This move comes shortly after Crypto.com faced a setback in Nevada under similar circumstances.
By filing first, Kalshi aims to have the matter addressed at the federal level rather than through state courts, focusing on jurisdictional authority rather than legality of contracts themselves. (Source)
