“New York intends to make event contract derivatives waste away under its iron curtain of state gaming laws before the courts get the chance to issue final rulings,” he said. “These are financial exchanges that offer financial instruments and operate across state lines. They match the bid from a resident of one state with the offer of a resident from another state and submit the trade to a clearinghouse that backstops the transactions of customers throughout the country. New York has no business regulating these interstate financial markets.”
The CFTC had previously sued New York over its stance on prediction markets.
New York sued Kalshi on July 31 after a federal judge ruled against Kalshi’s bid to block the state from filing a lawsuit. New York alleged that Kalshi was violating its state gambling laws by offering sports prediction markets.
“Kalshi has failed to obtain a license from the New York State Gaming Commission (Gaming Commission), sidestepping its obligation to pay taxes like licensed casinos and mobile sports gambling platforms do,” a press release from the state said. “This tax revenue from gambling regulation funds public schools, sports programs for underserved youth, and problem gambling education and treatment.”
Kalshi moved to transfer the case to federal court; New York moved to transfer the case back. The motions are currently awaiting a judge’s ruling.