Points of Focus

• Torres ruled that federal commodities law does not override New York gambling statutes.
• Kalshi’s injuries were deemed “largely monetary,” not meeting irreparable harm standards.
• Minnesota makes prediction market participation a felony starting Aug. 1.

US District Judge Analisa Torres, the same Southern District of New York judge who presided over SEC v. Ripple Labs, denied Kalshi’s request for a preliminary injunction against the New York State Gaming Commission on July 7, allowing the state’s enforcement action to proceed to the motion-to-dismiss stage in KalshiEX v. Williams.

The ruling rejected each of Kalshi’s three injunction arguments in sequence. According to Torres, federal commodities law does not override New York’s gambling statutes, rejecting Kalshi’s conflict-preemption claim.

Kalshi had argued that complying with New York law would violate the Commodity Futures Trading Commission’s (CFTC) impartial access requirements for Designated Contract Markets.

🚨NEW: Judge Torres from the @Ripple case is back at the center of another big legal battle. This time in @Kalshi's SDNY case, where she just denied the exchange a preliminary injunction, allowing the case to proceed to the motion-to-dismiss stage after finding that New York's… https://t.co/QlQNX8slMW

— Eleanor Terrett (@EleanorTerrett) July 8, 2026

On irreparable harm, the court held that Kalshi’s alleged injuries were “largely monetary” and that the cost of geolocating users state-by-state was an “ordinary burden” of complying with government regulation. On balance of equities and public interest, Torres sided firmly with New York, citing risks to users between the ages of 18 and 24 classified as a high-risk population for gambling addiction, concerns over college sports integrity, and the state’s sovereign interest in enforcing its own statutes.

Why New York matters more than the other losses

Kalshi’s legal scorecard across the country is uneven. It has won preliminary injunctions in New Jersey, where the Third Circuit upheld the lower court in April, and in Tennessee. It has lost in Maryland, Nevada, Arizona, and the Sixth Circuit and is actively suing Illinois over a law targeting prediction markets.

New York is different from all of those jurisdictions in one respect that dwarfs the others: It is the financial capital of the United States and sits in the Southern District of New York, whose decisions carry outsized weight in financial regulatory cases.

Sports gaming attorney Daniel Wallach described the ruling on X as a “major, major loss for Kalshi in the financial capital of the US, with likely knock-on effects in other cases (especially Connecticut and other SDNY lawsuits).”

Torres acknowledged the existing circuit split herself, citing rulings from both sides of the debate, and noted explicitly that her court was not bound by the Third Circuit’s contrary April conclusion. That explicit acknowledgment of the split by a prominent SDNY judge is the clearest signal yet that the question will eventually reach the supreme court.

The Minnesota felony clock and what comes next

The Torres ruling lands with a harder deadline already on the calendar. Minnesota Governor Tim Walz signed legislation on May 18, making it a felony to operate, host, or advertise prediction markets in the state, effective Aug. 1, 2026.

The CFTC sued Minnesota within 24 hours of the signing. An injunction hearing has concluded, but no ruling has been issued. If no injunction arrives before Aug. 1, operating Kalshi in Minnesota becomes a criminal act under state law.

Kalshi posted a $31-billion record in June trading volume, driven by the FIFA World Cup. It remains available across most US states. Nevada, Massachusetts, Ohio, Michigan, and Montana have secured or are actively enforcing restrictions. The platform has paused sports contracts in Nevada after a state court found them indistinguishable from regulated gambling.

Kalshi has not publicly commented on the Torres ruling or indicated whether it intends to appeal to the Second Circuit. An appeal appears probable given the stakes. A Second Circuit ruling against Kalshi’s position, combined with the existing Third Circuit ruling in its favor, would create a formal circuit split requiring supreme court resolution. The World Cup final is July 19 at MetLife Stadium in New Jersey. The more consequential match is now on a docket somewhere between lower Manhattan and Washington.