Judge Torres denies Kalshi emergency bid in state law clash

In a three-page order, Judge Torres found that Kalshi failed to meet the high legal threshold required for relief, noting that the exchange’s concerns regarding its federal registration were speculative rather than immediate. The court dismissed the argument that compliance costs constituted irreparable harm, reinforcing the July 7 decision that the Commodity Exchange Act does not automatically displace New York’s authority over sports-event contracts.

Crucially, the court asserted its independence from the Commodity Futures Trading Commission’s recent proposed rulemaking. While the CFTC has argued that federal law should expressly preempt state-level intervention, Judge Torres maintained that statutory interpretation remains the exclusive province of the judiciary under the Loper Bright precedent. This stance leaves the underlying lawsuit unresolved, as the Second Circuit has yet to issue its own ruling on the emergency motion.

The regulatory landscape remains fractured as federal courts provide inconsistent guidance. While a Minnesota judge recently signaled potential support for federal preemption, other jurisdictions, including Washington, have moved to uphold state-level restrictions. As Kalshi awaits a decision from the Second Circuit, the lack of a unified national framework continues to force prediction markets into a state-by-state legal defense.