Judge Jed S. Rakoff denied without prejudice an emergency Commodity Futures Trading Commission (CFTC) request for a temporary restraining order that would have blocked New York from pursuing its enforcement case against prediction market operator Kalshi.
Rakoff found that the CFTC had not shown a high likelihood of success on the merits or a likelihood of irreparable harm. The CFTC may renew the motion before Judge Victor Marrero on Friday, Aug. 7, according to the order.
New York Attorney General Letitia James sued Kalshi last Friday, alleging that it operates an illegal, unlicensed gambling business by offering contracts tied to sports, elections and other events. The New York State Gaming Commission issued Kalshi a cease-and-desist order in October 2025.
The ruling is the latest development in a jurisdictional dispute over whether federal commodities law preempts state gambling enforcement against event contracts traded on CFTC-regulated exchanges. State authorities argue that the contracts are wagers subject to state gambling laws, while the CFTC and Kalshi contend that they are derivatives subject to the CFTC’s exclusive jurisdiction.
