A federal appeals court has denied Kalshi's request for an injunction blocking New York state officials from enforcement action. Judge Myrna Perez of the Second Circuit Court of Appeals rejected the motion on Wednesday evening, one day before the state's moratorium on fines expires.
Kalshi is challenging New York's order to stop offering sports event derivative contracts to state residents. The platform argues its products fall under the Commodity Futures Trading Commission's (CFTC) jurisdiction and differ from sportsbook wagers. Contracts trade on an exchange with market-determined pricing, not operator-set odds.
New York regulators see it differently. The platform allows trading from age 18, while the state's sports betting minimum is 21. New York is the largest regulated betting market in the US; in 2025 it collected $1.32bn in tax revenue at a 51% rate on operator revenue.
Kalshi says a ban would inflict serious financial damage. New York is the country's financial capital with GDP per capita of $123,369, and losing access to that market would be critical. The company already faces similar trouble in Michigan, where a judge authorised daily fines of $120,000 starting 12 August for failing to geoblock. The CFTC has barred Kalshi from complying with that order, creating a jurisdictional clash.
Implementing GeoComply geofencing would require substantial investment; paying state fines is a sunk cost. Judge Perez has referred the case to a three-judge appellate panel, but no hearing date has been set. Lower courts have twice rejected Kalshi's requests this month, citing weak arguments for prevailing on the merits.
