Kalshi's New York Appeal: Injunction Denied, 37 States Back New York

By Andrew R. Jacobs, Esq. | Founder & Managing Attorney, Jacobs Counsel LLC | Director, Sports, Entertainment & Gaming Initiatives, Seton Hall University School of Law | Super Lawyers Rising Star 2026

Update, November 10, 2026. States, regulators, the casino industry and a former CFTC chairman back New York

On November 6, 2026, a wave of amicus briefs supporting New York reached the Second Circuit in KalshiEX LLC v. Williams, No. 26-1835. A coalition of tribes and tribal gaming organizations followed on November 9. Each brief asks the court to affirm Judge Torres's decision denying Kalshi a preliminary injunction against the New York State Gaming Commission. [10]

Who filed and what they argue

Ohio and Nevada led a brief for 37 states, the District of Columbia and the Northern Mariana Islands, filed by Ohio's Solicitor General as counsel of record. New Jersey, Pennsylvania and Connecticut are among the signers. The states argue that Kalshi's reading of the Commodity Exchange Act violates two clear-statement rules. The first is the federalism canon, which presumes Congress does not shift a traditional state power such as gambling regulation to the federal government without saying so clearly. The second is the major questions doctrine. The states also argue that the CFTC's recent change of position deserves no deference because, under Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), the scope of an agency's own jurisdiction is a question for the courts. [11]

The American Gaming Association, the casino industry's trade group, argues that Kalshi's sports contracts are sports bets in every meaningful sense and that a ruling for Kalshi would override each state's policy choices about gambling. It relies on the Sixth Circuit's decision for Ohio in KalshiEX LLC v. Schuler, 2026 WL 2884087 (6th Cir. Sept. 25, 2026), and the Ninth Circuit's decision for Nevada in KalshiEX LLC v. Assad, 190 F.4th 1098 (9th Cir. 2026). [12]

The North American Gaming Regulators Association and the International Association of Gaming Regulators focus on field preemption. They describe the licensing, age verification, geolocation, self-exclusion, advertising and integrity rules that state regulators enforce, and argue that the Commodity Exchange Act contains nothing comparable. [13]

Gary Gensler, who chaired the CFTC while Dodd-Frank was enacted and implemented, argues that Congress did not make sports bets "swaps" and did not move sports betting from the states to the CFTC. He also points to a consequence of Kalshi's theory. If sports bets were swaps, off-exchange retail sports bets would have been unlawful in every state since 2012, because only eligible contract participants may enter into off-exchange swaps under 7 U.S.C. § 2(e). His brief says the CFTC tried to address that problem through an October 2026 interim final rule issued without notice and comment, and argues that rule lacks a basis in the statute and was not issued jointly with the SEC as Dodd-Frank requires. [14] [17]

The tribal brief argues that Kalshi's sports contracts are class III gaming and that the Commodity Exchange Act did not impliedly repeal the Indian Gaming Regulatory Act, which allows class III gaming on Indian lands only if the tribe authorizes it, the state permits such gaming and it is conducted under a tribal-state compact, 25 U.S.C. § 2710(d)(1). [15]

Better Markets, a nonprofit financial-markets advocacy group, argues that sports bets are not swaps, that the Commodity Exchange Act prohibits listing gaming contracts on derivatives exchanges, and that displacing state law would harm consumers, election integrity and the derivatives markets themselves. [16]

Why it matters now

The briefs show how broad the coalition against Kalshi's position has become. It now includes the attorneys general of New York's neighbors, the licensed casino industry, gaming regulators, tribes and a former head of the agency Kalshi relies on. It also shows that the CFTC's change of position, including its October interim final rule on what counts as a swap, is now part of the argument in the New York case. Amicus briefs do not decide anything. They do signal the arguments the panel will weigh on the merits after it denied Kalshi interim relief on November 3.

Who this affects

Exchanges, brokers and sportsbooks weighing whether to follow the CFTC's call to lift state geofences face a New York appeal in which states and regulators are arguing that the CEA leaves state gaming law intact. New York licensees, suppliers and marketing partners should keep treating New York's licensing rules as controlling. Tribal gaming operators and their partners should watch the IGRA argument, which is separate from the preemption question.

What to do next

1. Do not rely on the CFTC's November 5 guidance as a defense to New York enforcement while this appeal is pending.

2. Review New York customer access, geolocation and marketing practices for any sports event contract product you offer or support.

3. Watch the Second Circuit docket for Kalshi's reply brief and a merits argument date, and the Supreme Court docket in No. 26-299, where Kalshi's response is due December 7, 2026.

Jacobs Counsel advises operators, licensees, sponsors and athletes on New York, New Jersey and Ohio gaming law. Readers with matters in Nevada, Connecticut or other states should speak with counsel admitted there.

Update, November 4, 2026. The Second Circuit denies interim relief

On the afternoon of November 3, 2026, a few hours after hearing argument, the Second Circuit denied Kalshi's motion for an injunction pending appeal in its case against the New York State Gaming Commission's members. The same order denied Kalshi's matching motion against Connecticut's Department of Consumer Protection and Coinbase's motion against Connecticut's Attorney General. The panel was Judges John M. Walker, Jr., Dennis Jacobs and Joseph F. Bianco. [6]

The order is two pages long and gives one reason. It states that the motions are denied "because Appellants have failed to make the required showing that an injunction pending appeal is warranted," citing Agudath Israel of America v. Cuomo, 983 F.3d 620, 631 (2d Cir. 2020). [6] The court did not write an opinion, and it did not say which part of that showing the appellants failed to make. The docket shows the motions were heard at 10:18 a.m. and the order was entered at 4:16 p.m. A certified copy went to the Southern District of New York the same afternoon. [7]

What the judges said at argument

News coverage of the argument reports that Judge Walker said he did not see how sports betting "in its entirety is a swap," and that Judge Bianco said the statutory swap definition was conceived for financial markets and that applying it here felt like fitting "a square peg into a round hole." [8] Those remarks come from news coverage only. They are not part of the order, and the panel may not be the one that decides the merits.

What the ruling does and does not decide

The order decides only interim relief. It does not decide whether sports event contracts are swaps or whether the Commodity Exchange Act preempts New York or Connecticut gaming law. Kalshi's appeal from Judge Torres's July 7 decision denying a preliminary injunction remains pending, and New York's appellee brief on that appeal was filed on October 30. [1][4]

The practical effect is that nothing in federal court now stops New York's Gaming Commission from enforcing state gaming law against Kalshi while the appeal runs. The Attorney General's separate enforcement action (S.D.N.Y. No. 1:26-cv-6550) and the Commission's subpoena petition in state court (Index No. 454547/2026) proceed on their own schedules. [1] News coverage reports that Connecticut's state court suits against these platforms had been on hold pending the Second Circuit's ruling. [8] Readers with matters in Connecticut should speak with counsel admitted there.

The order follows the Sixth and Ninth Circuit decisions for the states in KalshiEX LLC v. Schuler and KalshiEX LLC v. Assad, on which New York relies. [1] The Third Circuit ruled for Kalshi against New Jersey, and New Jersey's petition asking the Supreme Court to resolve the question is pending in No. 26-299. [9]

Who this affects

Kalshi, Coinbase and any exchange or broker offering sports event contracts to New York residents carry the most direct exposure, because there is no longer a pending request that could shield them from state enforcement in the near term. New York-licensed sportsbooks, suppliers, payment providers and marketing partners should assume New York will continue to treat these contracts as unlicensed sports wagering. Athletes, teams and agencies with prediction market sponsorships should expect more questions about marketing to New York audiences, especially audiences under 21.

What to do next

1. Treat New York's licensing position as the operating rule until a court says otherwise. An interim denial is not a merits loss, but it removes the near-term shield.

2. If you offer or support sports event contracts, document how you handle New York customers, geolocation and marketing, and be ready to change course quickly.

3. If you hold or are seeking a New York gaming license, review your relationships with unlicensed prediction market platforms now.

4. For athlete and influencer deals, confirm that contracts include suspension, termination and indemnity terms tied to regulatory action.

5. Watch the Second Circuit merits schedule and the Supreme Court docket in No. 26-299, where Kalshi's response is due December 7, 2026. [9]

Original article, November 2, 2026

On November 3, 2026, the Second Circuit will hear argument on Kalshi's motion to stop the New York State Gaming Commission from enforcing state gaming law while Kalshi appeals. The CFTC has been allowed to argue in support of Kalshi. The argument concerns only interim relief, so New York's position that Kalshi needs a state license stays in force until the court rules.

What changed

On October 24, 2025, the Gaming Commission directed Kalshi to stop offering what it called an unlicensed mobile sports wagering platform in New York. Kalshi sued the Commission and its members in the Southern District of New York three days later. Kalshi argues that its sports event contracts are swaps under the Commodity Exchange Act and that the CFTC's exclusive jurisdiction preempts New York gaming law. [4, at 5]

On July 7, 2026, Judge Analisa Torres denied a preliminary injunction. She dismissed the Commission itself on Eleventh Amendment grounds, so the case proceeds against its members in their official capacities. She assumed without deciding that the contracts are swaps and held that Kalshi had not shown that New York's gambling laws are preempted. She found Kalshi's harms "largely monetary" and concluded that New York's interests "heavily outweigh the interests articulated by Kalshi." [4, at 6 to 7, 11 and 19 to 21]

Kalshi appealed (KalshiEX LLC v. Williams, No. 26-1835) and asked for an injunction pending appeal. The Second Circuit denied interim relief while that motion was pending and placed the motion on its November 3 substantive motions calendar at 10:00 a.m. [1, at 23][2] On October 30 the court granted the CFTC's motion to argue as amicus curiae over New York's opposition. [3] The same day New York filed its 130-page appellee brief on the merits of the appeal. [1]

The ruling will reach beyond New York. In September the court directed that the same panel decide Kalshi's motion and similar motions in two Connecticut appeals, KalshiEX LLC v. Cafferelli, No. 26-2239, and Coinbase Financial Markets, Inc. v. Tong, No. 26-2297, and that the three appeals be heard in tandem. [5] Readers with matters in Connecticut should speak with counsel admitted there.

📥 Free Download: Gaming Compliance 101

Understand skill, chance, sweepstakes and the compliance questions behind a gaming launch.

What New York argues

The brief makes three main points. [1, at 1 to 4]

1. Sports outcome contracts are not swaps, because a game result is not an event "associated with a potential financial, economic, or commercial consequence" under 7 U.S.C. § 1a(47)(A)(ii). New York relies on the Sixth and Ninth Circuit decisions in KalshiEX LLC v. Schuler and KalshiEX LLC v. Assad.

2. Even if some contracts are swaps, the CFTC's "exclusive jurisdiction" in 7 U.S.C. § 2(a)(1)(A) lacks the language of an express preemption clause, and the statute's savings clauses defeat field and conflict preemption. New York also argues that a federal agency cannot create conflict preemption by telling private parties to ignore state law.

3. Kalshi's claimed harms come largely from the Attorney General's separate enforcement action, and the Attorney General is not a party to this case.

Three New York proceedings, not one

New York is pursuing Kalshi on three tracks, and they move on different clocks. [1, at 20 n.7 and 23 n.8]

• The Gaming Commission's federal case on appeal at the Second Circuit, described above.
• The Attorney General's enforcement action, People v. KalshiEX LLC, filed in state court in July 2026 and removed to federal court (S.D.N.Y. No. 1:26-cv-6550).
• The Gaming Commission's October 22 state court petition to enforce its investigative subpoenas (Index No. 454547/2026, N.Y. County). The court signed an order to show cause on October 29.

Who this affects

Kalshi and other exchanges that offer sports contracts to New York residents face the most direct risk. New York-licensed sportsbooks, suppliers and marketing partners should treat any prediction market relationship as a licensing issue until a court says otherwise. Athletes and their advisors should review sponsorship and appearance deals with prediction market brands, because a ruling for New York could affect marketing in the state.

What to do next

1. Do not treat the November 3 argument as a merits ruling. A decision on the motion may come quickly, but the full appeal will take longer.

2. Keep New York customer access and marketing decisions documented and reversible.

3. If you hold a New York gaming license or are applying for one, review your exposure to unlicensed operators before a regulator asks.

4. For athlete deals, confirm that endorsement contracts include suspension, termination and indemnity terms tied to regulatory change.

Sources

1. Brief for Appellees, KalshiEX LLC v. Williams, No. 26-1835, Dkt. 72 (2d Cir. filed Oct. 30, 2026).

2. Notice of Motion Placed on the Calendar, KalshiEX LLC v. Williams, No. 26-1835, Dkt. 60 (2d Cir. Oct. 21, 2026). https://www.courtlistener.com/recap/gov.uscourts.ca2.277417a9-ec09-435b-9ce5-7c8293cd50c8/gov.uscourts.ca2.277417a9-ec09-435b-9ce5-7c8293cd50c8.60.0.pdf

3. Motion Order granting CFTC motion for oral argument, KalshiEX LLC v. Williams, No. 26-1835, Dkt. 70 (2d Cir. Oct. 30, 2026) (docket text only).

4. Opinion and Order, KalshiEX LLC v. Williams, No. 1:25-cv-08846, ECF No. 106 (S.D.N.Y. July 7, 2026), amended by ECF No. 109 (July 13, 2026) (correcting a scrivener's error). https://www.courtlistener.com/recap/gov.uscourts.nysd.651836/gov.uscourts.nysd.651836.106.0.pdf

5. Order, KalshiEX LLC v. Williams, No. 26-1835, Dkt. 46 (2d Cir. Sept. 3, 2026). https://www.courtlistener.com/recap/gov.uscourts.ca2.277417a9-ec09-435b-9ce5-7c8293cd50c8/gov.uscourts.ca2.277417a9-ec09-435b-9ce5-7c8293cd50c8.46.0.pdf

6. Motion Order denying motions for injunction pending appeal, KalshiEX LLC v. Williams, No. 26-1835, Dkt. 74 (2d Cir. Nov. 3, 2026) (also deciding Nos. 26-2239 and 26-2297). https://www.courtlistener.com/recap/gov.uscourts.ca2.277417a9-ec09-435b-9ce5-7c8293cd50c8/gov.uscourts.ca2.277417a9-ec09-435b-9ce5-7c8293cd50c8.74.0.pdf

7. Docket entries 73 (motion heard, Nov. 3, 2026) and 75 (certified order to S.D.N.Y., Nov. 3, 2026), KalshiEX LLC v. Williams, No. 26-1835 (2d Cir.) (docket text). https://www.courtlistener.com/docket/73601450/kalshiex-llc-v-williams/

8. News coverage, used only where labeled. InGame, "Second Circuit Denies Kalshi Injunction After Judges Doubt Sports Contracts Are Swaps" (Nov. 3, 2026). https://www.ingame.com/second-circuit-judges-kalshi-ny-ct/

9. Docket, No. 26-299 (U.S.) (Kalshi response extended to Dec. 7, 2026 by order of Oct. 30, 2026). supremecourt.gov

10. Docket, KalshiEX LLC v. Williams, No. 26-1835 (2d Cir.), entries 83 to 103 (Nov. 6 to 9, 2026). https://www.courtlistener.com/docket/73601450/kalshiex-llc-v-williams/

11. Brief of Amici Curiae Ohio, Nevada, 35 Other States, the District of Columbia, and the Northern Mariana Islands Supporting Appellees, No. 26-1835, Dkt. 91 (2d Cir. Nov. 6, 2026).

12. Brief of Amicus Curiae American Gaming Association in Support of Defendants-Appellees, No. 26-1835, Dkt. 96 (2d Cir. Nov. 6, 2026).

13. Brief of Amici Curiae North American Gaming Regulators Association and International Association of Gaming Regulators, No. 26-1835, Dkt. 83 (2d Cir. Nov. 6, 2026).

14. Brief for Amicus Curiae Gary Gensler in Support of Defendants-Appellees, No. 26-1835, Dkt. 93 (2d Cir. Nov. 6, 2026).

15. Brief of Indian Gaming Association, National Congress of American Indians, et al., in Support of Defendants-Appellees, No. 26-1835, Dkt. 99 (2d Cir. Nov. 9, 2026).

16. Brief of Better Markets, Inc. as Amicus Curiae Supporting Defendants-Appellees and Affirmance, No. 26-1835, Dkt. 84 (2d Cir. Nov. 6, 2026).

17. Commodity Futures Trading Commission, Further Definition of "Swap" to Exclude Casino-Style Gambling Products, 91 Fed. Reg. 65969 (Oct. 19, 2026) (interim final rule).

Need Legal Support?

We help high-performing creators, athletes, and founders protect their brands and build sustainable businesses.