The Commodity Futures Trading Commission filed an emergency motion for a temporary restraining order on July 31 against New York's enforcement action targeting the prediction market platform Kalshi, according to a post from Chairman Michael Selig on X.
New York's attorney general sued Kalshi the same day, claiming the platform operates as an illegal gambling operation. The CFTC's emergency filing asserts federal jurisdiction over prediction markets and seeks to prevent New York from enforcing its lawsuit while the commission's own April 2026 case against the state proceeds.
Kalshi allows users to trade contracts that settle based on the outcome of future events, from elections to economic data releases. The platform has operated under the view that it holds CFTC approval to list certain binary event contracts. New York has disputed that federal clearance shields Kalshi from state gambling laws, arguing the contracts constitute illegal wagering regardless of federal classification.
Chairman Selig's post framed the filing as a defense of federal regulatory authority. The CFTC in April sued New York directly, challenging state restrictions on prediction markets as violations of the Commodity Exchange Act's federal preemption clause. The emergency restraining order motion comes as New York simultaneously sued Kalshi itself, compressing the CFTC's broader preemption case into an immediate court conflict.
A temporary restraining order, if granted by a federal judge, would pause New York's enforcement action pending resolution of the CFTC's broader preemption case. Such orders typically last no more than 14 days but can be extended if a preliminary injunction is filed. Both filings arrived on the same day.
Prediction markets remain a contested regulatory space. The CFTC has approved limited binary event contracts through Kalshi and Polymarket, while state attorneys general and gambling regulators have questioned whether those approvals override existing state law. New York has been the most aggressive state enforcer on the issue.
