NY Federal Judge Denies Kalshi Injunction Bid for Second Time This Month

A federal judge in Manhattan has denied Kalshi’s bid for emergency relief for the second time this month, refusing to pause New York’s enforcement of state gambling laws against the prediction market operator while its appeal moves forward. U.S. District Judge Analisa Torres issued the three-page order on July 27 in KalshiEX LLC v. Williams, rejecting Kalshi’s request for an injunction pending appeal.

The ruling doesn’t dismiss Kalshi’s appeal or resolve the underlying lawsuit. It simply strips away any temporary shield from New York enforcement while the case works its way through the Second Circuit. For a company that has leaned on rapid legal maneuvering to keep its sports-related event contracts available across multiple states, the back-to-back losses in the same courtroom are a notable setback.

A Tougher Standard, A Second Loss

Torres first denied Kalshi’s motion for a preliminary injunction on July 7, ruling that New York’s gambling laws as applied to Kalshi’s sports-event contracts are not preempted by the Commodity Exchange Act. Kalshi appealed that decision to the Second Circuit and asked Torres for a stay pending appeal — essentially a request to keep operating in New York while the higher court sorts out the merits.

An injunction pending appeal requires a stronger showing than an ordinary preliminary injunction, and Torres found Kalshi came up short on every front. She wrote that the company had not demonstrated a likelihood of success on appeal, had not shown irreparable harm, and that the balance of equities and public interest still favored the state. The court also rejected Kalshi’s fallback request for short-term administrative relief while it awaited a fuller ruling.

Notably, Torres also declined to defer to the CFTC’s own view that federal commodities law should preempt state gambling statutes for these contracts, instead applying the Supreme Court’s Loper Bright framework to interpret the statute independently of the agency’s position.

What Happens Next

Kalshi’s appeal to the Second Circuit — case No. 26-1835 — remains pending separately from this district court denial, and New York regulators urged the appeals court on July 27 to reject Kalshi’s parallel emergency request there as well. As of now, no order from the Second Circuit on that motion has been issued.

Until that changes, the practical effect is straightforward: the New York State Gaming Commission can continue treating Kalshi’s sports-related event contracts as subject to state gambling law, and the company has no court-ordered protection from that enforcement. It’s the latest data point in a wider, unsettled fight between prediction market operators and state regulators — notably, a federal judge in Minnesota moved in the opposite direction just this week, blocking that state from enforcing its own prediction market ban against both Kalshi and Polymarket. The split outcomes underscore just how unresolved the preemption question remains nationally, and bettors weighing Kalshi against other options may want to keep an eye on how the Second Circuit ultimately rules.

For now, Kalshi’s broader legal strategy — using federal registration as a shield against a patchwork of state gambling statutes — has yet to find traction in New York courts, and this second denial from Torres only reinforces that pattern heading into the appellate stage.