CFTC declares market emergency, orders Kalshi to continue to operate in New York

EDIT: see DannyBee's comment below ( https://news.ycombinator.com/item?id=49266746 ). It does look like the CFTC has extrapolated the "nationwide" out of either some novel interpretation of the filing or just entirely fabricated it as their justification for their action.

I've got no love for Kalshi, but "orders Kalshi to continue operate in New York" doesn't seem to be present anywhere in the actual release.

The article presents the sequence of events as:

1. The State of NY files a lawsuit against Kalshi under the theory that it can be regulated by state gambling laws.

2. The State of NY files for a temporary restraining order requiring Kalshi to halt trading nationally, not just in NY.

3. Kalshi reaches out to the CFTC to claim that NY doesn't have the authority to regulate interstate commerce.

4. The CFTC agrees and uses their authority to override the TRO.

That seems pretty aligned with how interstate commerce is regulated and managed in the US.

Am I reading this right? The state of New York wants Kalshi to stop offering prediction gambling, excuse me, "event contracts" in New York, and the federal Commodity Futures Trading Commission just ordered Kalshi to keep operating in New York regardless?

So the CFTC frames Kalshi as a financial derivatives exchange for the financial instrument category of event contracts, dismissing NYs characterization of it as a gambling/betting platform. Interesting.

Friends in high places are worth their weight in gold. Anyone want to bet on how much they weigh?

I'm with the state of NY on the merits here. They're basically BetFair, and they should be subject to regulation like it.

Americans’ continued ability to gamble, err…, trade multi-leg parlays is a matter of national security!

everyone's anger is warranted.

does CTFC have mandate to enforce things nationally - yeah. Does NY have a mandate to stop thing nationwide NO.

however the murkiness with the whole thing is about corruption and having friends, sons of the president as your backers etc - proper procedures are no longer followed.

With “Chevron Deference” struck down, I assume this means the courts will get to decide if it is in fact gambling or not?

This seems correct, even though I think it's unfortunate that these prediction markets are ruining so many people's lives.

> In the lawsuit, filed on July 31, New York seeks a temporary restraining order prohibiting KalshiEX, LLC from offering all event contracts nationwide and more than $36 billion in damages.

This seems naturally the territory of the CFTC. They have exclusive right to regulate futures and derivatives contracts, which Congress handed them. Also, it seems straightforwardly anti-commerce-clause to allow NY to prohibit Kalshi from offering these contracts nationwide.

> said Chairman Michael S. Selig. “Congress did not intend for derivatives exchanges to be regulated under a patchwork of state gaming laws.

Ah yes, "derivatives" which are "not intended to fall under gaming laws" such as... *checks Kalshi website* 58 million dollars riding on which team is the 2027 NFL champion.

Oh yeah, totally a financial derivative there, not related to gambling at all. *sigh*

Here is something to bet on

https://www.ncsl.org/financial-services/prediction-markets-2...

Would Kalshi allow people to bet on whether Kalshi will be banned in a particular state

An order to _continue_ operation? Has that ever happened before?

Can't New York go after payment processors and stop anyone from paying them money or people cashing out?

Firefox says "Error Code: SEC_ERROR_UNKNOWN_ISSUER" for that CFTC link (untrusted certificate issued by Avast in Prague) and won't open the site

Laughable excuse for a country that will declare a gambling company systemically important to the economy.

“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,” said Chairman Michael S. Selig.

President Donald J. Trump nominated Michael S. Selig to serve as the 16th Chairman of the Commodity Futures Trading Commission (CFTC) on October 27, 2025. The U.S. Senate confirmed him on December 18, 2025, and he was sworn into office on December 22, 2025.

This is the time for crypto projects to enjoy Federal protection.

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phenomenal and I want to address snarky comments here

the “states rights” crowd has always used laws passed by Congress, which the CEA has been. other examples such as a Supreme Court overruling itself made a national regulation fall back to the states solely because Congress has not and has never passed a law on the topic, there is insufficient consensus on proposed laws so those topics will remain at the states

in this case, the actual argument is that the case should be heard by the courts at all, and NY wanted to halt operations WHILE it was heard by the courts. CFTC overruled the pre-verdict halting

and finally, the courts of course will likely not result in anything, as the Supremacy Clause of the Constitution is clear that federal law is supreme when there is a conflict, and the CFTC chooses to leverage that

federal government can always choose to ignore a state law, as it does in some markets

Wait, so all that Republican talk of support for state's rights was really just all about the racism this whole time? Shocker.

I hope the Kalshi executives remember that New York state police do not report to the CFTC and are not bound by its orders!

Just listen to the overwhelming silence from the “states’ rights” crowd.

It was never more virtuous to be options-trading GME shares on Robinhood than gambling at the dog track or betting on basketball games. The only reason some regulators are going after Kalshi or Polymarket is that the casino owners are lining these particular politicians' pockets more than the futures trading companies are.

I actually am not opinionated on it other than all kinds of gambling are basically the same -- and that includes a lot of the ways stock market is used in practice.

I do admit gambling addiction is a real thing and that this new super convenient and easy and legal option incrementally brings more people into that world of pain. But I also think it's stupid to ban gambling like they did with alcohol in the last century. It'll just put more control in the hands of the mob.

The mob. There's an organization that I bet is also eagerly lining the pockets of these "kill Kalshi" regulators.