Kalshi, an event-based trading platform, has taken legal action against the New York State Gaming Commission.
The company said the regulator has exceeded its legal authority by ordering it to stop offering certain sports-related contracts in New York.
In a complaint filed in Manhattan’s federal court, Kalshi argued that it is regulated by the Commodity Futures Trading Commission (CFTC), a federal agency, and not by individual states.
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On October 24, New York’s gaming authority sent Kalshi a cease-and-desist letter. The letter claimed Kalshi was offering an illegal online sports betting service without a proper state license.
It directed the company to stop running, advertising, or managing its platform for any sports-related contracts within the state.
Kalshi argued that its contracts differ from traditional sports betting. Instead, the company said these are financial products that fall under federal rules, not state gambling laws.
Kalshi also warned that following New York’s order would disrupt its business. It said shutting down services in the state would cause long-term damage and require technical changes that may not work.
The company has asked the court to block New York from enforcing its order, both temporarily and permanently. It also wants the court to confirm that state regulators cannot control a federally supervised exchange like Kalshi.
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