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A widening legal battle over prediction markets now includes 38 active cases across 21 states, and New York is one of the most closely watched fronts.
Casino.org’s new litigation tracker says the core dispute is whether the Commodity Futures Trading Commission has exclusive authority over prediction market contracts or whether state regulators can restrict them under gambling laws. For New York readers, that question is especially relevant because KalshiEX LLC v. Williams remains on appeal after a federal judge dismissed Kalshi’s preemption argument and denied preliminary relief.
New York remains a key test case
According to the tracker, New York is among the more aggressive states opposing prediction markets, alongside Minnesota, Nevada, and Arizona. The New York case centers on whether a federally regulated prediction market can keep offering contracts despite state gaming enforcement.
Casino.org reports that District Judge Analisa Torres dismissed Kalshi’s federal preemption argument in New York, and the case is now on appeal. That leaves New York in a different procedural posture from New Jersey, where Kalshi obtained a preliminary injunction in April 2025 that was later upheld by a Third Circuit judge.
The tracker argues that conflicting rulings like those could ultimately require Supreme Court review, though no such outcome is guaranteed.
The national fight is growing quickly
The tracker says exchanges have received cease-and-desist letters in at least 10 jurisdictions, while the CFTC launched federal lawsuits in nine states in 2026. It also says 10 states, including Connecticut, New York, and Arizona, are taking enforcement action against exchanges.
Minnesota is one of the most significant recent examples. The CFTC sued the state on May 19, 2026, seeking to block a law that would have made operating or assisting prediction market exchanges a felony. On July 27, 2026, Judge Katherine Menendez issued a preliminary injunction before the law’s Aug. 1 effective date. The tracker quotes the ruling as saying, “Kalshi and Polymarket US are designated contract markets, so the CFTC has exclusive jurisdiction to regulate transactions involving those ‘swaps.’”
Utah is the only state that has managed a comprehensive ban on prediction market trading, according to the tracker.
What New York players should watch
For New Yorkers, the main issue is not a new product launch but whether these markets are treated more like federally regulated financial contracts or gambling activity subject to state restrictions. The New York appeal in KalshiEX LLC v. Williams is one of the clearest cases to watch because it could help shape what regulators can block in the state while the broader national fight continues.
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Source: As reported by Chris Jonat.
