Prediction markets lost court decisions in New York and Wisconsin this week. New York's Second Circuit denied Kalshi's emergency motion to block the state from enforcing gambling laws against the company. The case now moves to a three-judge panel.
If that panel also denies relief, New York can begin enforcement action against Kalshi. The state agreed to pause enforcement until 30 July while the case proceeds. Kalshi is appealing a ruling by Judge Annalisa Torres, who denied an injunction earlier this month. The company's legal options are narrowing.
Attorney General Letitia James can file suit in state court as soon as 1 August if the panel or the Supreme Court do not intervene. Attorney Daniel Wallach expects the dispute over sports prediction markets to reach the Supreme Court. The Second Circuit ruling may create a circuit split — the Third Circuit previously sided with Kalshi in a dispute with New Jersey regulators. The company has also appealed losses in Arizona and Nevada to the Ninth Circuit.
In Wisconsin, Judge William Griesbach denied the CFTC an injunction in its suit against the state. The CFTC filed after Wisconsin opened cases against Kalshi, Polymarket, Coinbase, Crypto.com and Robinhood. The judge found federal law likely does not pre-empt state gambling laws. Wisconsin legalised online sports betting this year through tribal compacts.
Wisconsin threatened prediction market users with loss of voting rights. The state's election commission cited statute 6.03, which bars those who bet on elections from voting. Kalshi staff called the threat 'insane' and 'unconstitutional'.
Kalshi won in Minnesota this week — a judge blocked the state's ban on prediction markets but left open action against sports contracts offered by Kalshi and Polymarket.
