Federal judge Vernon D. Oliver denied Kalshi's emergency motion to block enforcement of Connecticut gambling laws during appeal. The company had attempted to use the Commodity Futures Trading Commission's 'market emergency' order as grounds to shield itself from state action. The court ruled that the regulator cannot issue directives that contradict a judicial interpretation of federal law.
The decision came five days after Oliver found that Kalshi's sports contracts are not swaps and therefore fall outside the CFTC's exclusive jurisdiction. Kalshi had cited the commission's 11 August order, issued after New York Attorney General Letitia James sued to bar the platform from operating in the state. The CFTC declared a 'market emergency' and directed the operator to continue functioning as an exchange even if a state court ordered it to stop.
Kalshi argued the order confirmed a conflict between federal and state law. Oliver disagreed. 'This argument ignores the key finding: the contracts in question are not swaps subject to CFTC oversight,' he wrote. He invoked a 2024 Supreme Court ruling that requires courts to interpret federal statutes independently rather than defer to an administrative agency's view.
The court also rejected Kalshi's claim of irreparable harm. The company had pointed to the risk of civil and criminal liability, plus economic and reputational damage. Oliver called those threats speculative — the CFTC has made no statement suggesting it would revoke the operator's licence for complying with state law. Connecticut authorities had voluntarily paused enforcement while the initial suit was heard.
