CFTC orders Kalshi to continue operating as New York seeks $36 billion in damages

New York wants to shut down Kalshi. The federal government says not so fast. On July 31, 2026, New York Attorney General Letitia James and Governor Kathy Hochul filed a lawsuit against KalshiEX LLC, alleging the prediction market platform operates as an unlicensed gambling business in the state. The Commodity Futures Trading Commission responded by filing an emergency motion for a temporary restraining order in federal court, essentially telling New York to back off from a market the CFTC considers its own turf. Kalshi remains operational as the legal fireworks play out. The state’s case against Kalshi New York’s lawsuit zeroes in on two main arguments. First, that Kalshi’s sports-event contracts are functionally indistinguishable from sports betting, which is heavily regulated at the state level. Second, that Kalshi lets 18-year-olds participate in those markets, undercutting New York’s requirement that sports bettors be at least 21. New York is seeking to halt Kalshi’s operations entirely, reclaim profits from the platform, and impose fines that could reach into the tens of billions of dollars. The New York Gaming Commission issued a cease-and-desist letter to Kalshi back in Octo...