Kalshi Loses Second Emergency Injunction in New York

Jonathan Rodriguez

Written by: Jonathan Rodriguez

Published: Fri Jul 31, 2026, 7:00 am ET

Read Time: 4 minutes

Kalshi Loses Second Emergency Injunction in New York

industry

Kalshi has suffered another setback in its legal fight against New York regulators after a federal judge denied the company's latest request for emergency relief. 

The ruling follows an earlier decision in July that also rejected Kalshi's attempt to block state enforcement while the broader case moves through the courts.

The latest decision leaves Kalshi without temporary protection from New York's gambling laws while its appeal continues. It also marks another victory for state regulators defending their authority over sports event contracts.

The dispute remains one of the most closely watched legal battles involving prediction markets. Its outcome could influence how states regulate event contracts that resemble sports wagering offered by US online sportsbooks. 

At the same time, the case continues to shape the broader debate surrounding New York gambling laws and federal regulatory authority.

District Court in NY Denies Kalshi's Second Emergency Injunction Request

Kalshi asked the U.S. District Court for the Southern District of New York for an emergency injunction pending appeal. The company wanted the court to stop New York officials from enforcing state gambling laws while it challenged an earlier ruling.

Judge Analisa Torres denied the motion, marking Kalshi's second unsuccessful injunction request in New York. Earlier in July, Torres also denied the company's request for a preliminary injunction after concluding that Kalshi failed to demonstrate a likelihood of success on the merits.

The judge found no reason to reverse that earlier conclusion through emergency relief. Instead, she determined that Kalshi sought the same protection the court had already declined to grant.

Judge Torres Found Emergency Relief Was Not Warranted

In denying Kalshi's motion, Judge Torres concluded that the company had not satisfied the legal requirements for an injunction pending appeal. She also found that Kalshi was effectively seeking the same relief the court had already rejected weeks earlier.

Torres explained her reasoning in the order:

"Kalshi asked for something even more drastic than a routine injunction pending appeal; it seeks the very injunctive relief that this court already denied. Defendants have laid out significant harms associated with halting their efforts to enforce state gaming regulations."

The judge emphasized that New York has a significant interest in enforcing its gaming laws. She also found that Kalshi failed to demonstrate the factors necessary to justify emergency relief.

After the district court denied the motion, Kalshi sought similar emergency relief from the U.S. Court of Appeals for the Second Circuit. The appellate court later denied that request in a brief order without explaining its reasoning.

As a result, no court has granted Kalshi temporary protection while its appeal proceeds.

State Agreed to Pause Enforcement During Emergency Appeal

Although Kalshi did not obtain emergency relief, New York regulators previously assured the courts they would refrain from pursuing civil enforcement while the emergency appeal remained pending before the Second Circuit.

In court filings, the New York State Gaming Commission and Attorney General Letitia James' office stated they would not seek civil penalties or other enforcement measures during that limited period.

Those assurances helped address Kalshi's claims of immediate and irreparable harm while the appellate court considered its emergency request.

Now that the Second Circuit has denied emergency relief, the litigation returns to the ordinary appellate process. The merits of Kalshi's appeal remain unresolved, and the state's earlier commitment applied only while the emergency motion was under review.

If New York ultimately proceeds with civil enforcement under its gambling laws, available remedies could include:

  • Civil penalties
  • Restitution
  • Injunctive relief
  • Potential liability for company executives under New York law

Whether those remedies are pursued will depend on future enforcement decisions and the outcome of the ongoing litigation.

Kalshi argues federal law preempts New York gambling enforcement

Kalshi continues to argue that its sports event contracts fall under the Commodity Futures Trading Commission (CFTC).

The company relies on the federal Commodity Exchange Act, which governs the trading of futures, swaps, and other derivatives in the United States. Congress enacted the law to establish a uniform federal framework for commodity markets . This also grants the CFTC exclusive authority over designated contract markets.

Kalshi maintains that its event contracts qualify as federally regulated financial derivatives rather than traditional sports wagers. Therefore, the company argues that states cannot apply their gambling laws to products overseen by the CFTC.

New York strongly disagrees with that position. State officials contend that contracts based on sporting events function as sports betting regardless of their federal approval. Consequently, they argue the contracts violate state gambling laws due to Kalshi's unauthorized sports wagering.

The dispute has become part of Kalshi's broader legal campaign against several states challenging sports prediction markets. While courts have reached different conclusions across the country, the New York appeal could provide another important test of the relationship between federal commodities regulation and state gambling laws.

For now, Kalshi's appeal will continue before the Second Circuit without emergency relief. The eventual outcome could shape the future of prediction markets and their relationship with US online sportsbooks across the United States.

Jonathan Rodriguez
Jonathan Rodriguez

Jonathan is an avid basketball fan, and is often looking forward to the next upcoming NBA season when not checking players' stats during games. He also likes to keep his ears on the ground for the latest rumblings in the online casino industry.

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