The CFTC has invoked emergency powers to order Kalshi to continue operating in New York, as the federal-state jurisdictional dispute over prediction markets escalates once again.

The U.S. Commodity Futures Trading Commission (CFTC) announced it has invoked emergency authority to order prediction market platform Kalshi to continue operating in New York State, directly opposing the New York State government’s lawsuit seeking to shut down the platform. New York State Attorney General Letitia James sued Kalshi in late July, accusing the platform of offering sports-related prediction markets in violation of state law, and charging it with operating without a license and evading required taxes. A federal judge had previously rejected Kalshi’s request to block New York State’s lawsuit. CFTC Chairman Mike Selig made clear that Congress did not intend for derivatives trading platforms to be regulated by fragmented state rules, noting that prediction markets are federally regulated swap products and fall under interstate financial markets, so New York State has no authority to intervene with its own state laws. Selig criticized New York State for attempting to kill event contract derivatives before a final court ruling. This conflict further intensifies the long-running battle over regulatory authority for prediction markets between the federal and state governments. States argue that at least sports-related prediction markets fall under state law regulation, while the CFTC insists it holds comprehensive jurisdiction.