Federal Regulator Backs Prediction Market in Defiance of Court Order

The CFTC’s directive, which the agency describes as an exercise of emergency authority, mandates that Kalshi remain active despite a federal judge’s recent refusal to block New York from enforcing its gambling statutes. New York officials have sued the company, alleging it functions as an unlicensed gambling operation. This latest intervention marks a significant escalation in the struggle for regulatory control over platforms that allow users to wager on real-world events.

Benjamin Schiffrin of the advocacy group Better Markets argued that the agency appears to believe the law does not apply to its operations, noting this is not the first instance where the CFTC has directed the firm to bypass judicial rulings. The agency previously intervened after a Michigan court ordered the platform to refund certain bets. Critics, including Public Citizen’s Tyson Slocum, characterized the move as a massive overreach, warning that the federal regulator is effectively declaring a phony emergency to shield a private interest from state-level accountability. Under Chairman Michael Selig, the CFTC continues to maintain that it holds sole regulatory authority, a stance that has drawn sharp condemnation from state officials and watchdog groups alike.