EDIT: see DannyBee's comment below ( https://news.ycombinator.com/item?id=49266746 ). It does look like the CFTC has extrapolated the "nationwide" out of either some novel interpretation of the filing or just entirely fabricated it as their justification for their action.
I've got no love for Kalshi, but "orders Kalshi to continue operate in New York" doesn't seem to be present anywhere in the actual release.
The article presents the sequence of events as:
1. The State of NY files a lawsuit against Kalshi under the theory that it can be regulated by state gambling laws.
2. The State of NY files for a temporary restraining order requiring Kalshi to halt trading nationally, not just in NY.
3. Kalshi reaches out to the CFTC to claim that NY doesn't have the authority to regulate interstate commerce.
4. The CFTC agrees and uses their authority to override the TRO.
That seems pretty aligned with how interstate commerce is regulated and managed in the US.
I think it's good to have the official context from the state of NY as well, which argues that Kalshi meets the state's standards for gambling; has serially refused to get the required licenses, and serves customers aged 18-20 in a market where gambling is restricted by law to people over 21.
My impression was that NY wanted a TRO to stop Kalshi operating in New York, not nationally. A TRO seems like a rather extreme measure in that it assumes the plaintiffs win the lawsuit as a premise, but I guess that's partly a function of how long New York has been trying and failing to obtain compliance with its gaming laws, and intended to provoke a preliminary hearing into the merits of the case (vs letting the litigation drag on for years without anyhting changing).
> 2. The State of NY files for a temporary restraining order requiring Kalshi to halt trading nationally, not just in NY.
The State of New York did *NOT* file a temporary restraining order, neither in NY or nationally. Please find a citation of that if you want to claim it is true.
Rather the State of New York filed suit here to stop operations in New York:
"Permanently enjoining Respondent and its principals, agents, and employees from
operating an unlawful gambling business, or otherwise advancing gambling activity, or
profiting from gambling activity, within or from New York or to persons in New York,
without being licensed by the New York State Gaming Commission"
That claim is coming directly from the CFTC, it is not this user's novel claim.
It seems that overall the CFTC and the NYAG are presenting materially different event time lines, so as an outsider it's a bit unclear what is actually happening.
It seems that New York is asking the court for a temporary restraining order that would prohibit Kalshi from offering all event contracts nationwide. I also have zero love for Kalshi, but I can see why such a request would be concerning, regardless of whether I think Kalshi is a degenerate trash heap.
In saying, "New York seeks a temporary restraining order prohibiting KalshiEX, LLC from offering all event contracts nationwide" the CFTC's press release substantially misrepresents the filing by the NY AG. On page 29, the filing requests "Permanently enjoining Respondent and its principals, agents, and employees from operating an unlawful gambling business, or otherwise advancing gambling activity, or profiting from gambling activity, within or from New York or to persons in New York, without being licensed by the New York State Gaming Commission" (https://ag.ny.gov/sites/default/files/court-filings/new-york...).
Since Kalshi's HQ is in NY, I guess the most charitable interpretation is that perhaps the CFTC's statement is based on the assumption granting the TRO would have the net effect of disrupting Kalshi's operations everywhere until they can serve the site from outside NY. Of course, without disclosing that extrapolation, the statement is still factually incorrect.
Setting aside that significant error, I suspect this CFTC order is an attempt to create a federal vs state conflict in the hope the judge will suspend or defer any TRO until that issue is decided. I imagine Kalshi will file a response tomorrow arguing exactly that. Ultimately, this will still come down to whether Kalshi can be regulated by states, and if so, whether it's gambling.
…And growing wheat on your own land to feed your own cattle somehow counts as interstate commerce, despite no commerce taking place and the wheat never leaving your property, let alone the state. (Wickard v. Filburn)
Wickard was growing wheat for interstate commerce. The case was about whether the additional wheat he grew for "personal" use was also part of interstate commerce.
Just around, or slightly around the level of testing that Roe vs Wade prior to Dobbs. Or a bakers dozen of other established precedents that were "one of the more tested legal concepts" until ... recently.
Unfortunately for Roe v Wade, abortion and a right to privacy aren't explicitly laid out in the Constitution. Interstate commerce is. New York would be entirely in their right to ban Kalshi in New York but not halt operations nationwide.
Generally speaking, no: there’s a significant difference in precedent between the two. IANAL, but interstate commerce is explicitly written into the Constitution as the jurisdiction of the federal government and was tested (and generally serially expanded) in court multiple times long before Roe.
Not literally. I think the text in question is: "within or from New York or to persons in New York." Where CFTC is arguing that "from" would have interstate consequences. I'm not a legal expert, though, so I have no idea if something similar has been fought in court before.
edit
Interesting, I found KalshiEX LLC v. Flaherty [1] which seems strikingly similar to this case and was ruled in favor of Kalshi.
"The Third Circuit affirmed the District Court’s order. The appellate court held that the Commodity Exchange Act (CEA) grants the Commodity Futures Trading Commission (CFTC) exclusive jurisdiction over swaps, including sports-related event contracts traded on CFTC-licensed DCMs."
These are the CFTC licensed contract markets, which are not the same exact thing.
I'm not sure how to explain all this without writing a 70 page dissertation on HN, and it's probably not worth it :)
Overall - this is a wildly complicated area. To give you an idea how complicated: Ignoring state law, transmitting gambling information for sports events over the wire is a federal crime. See 18 U.S.C. § 1084(a), which makes it a crime for a person “engaged in the business of betting or wagering” knowingly to use an interstate or foreign wire facility to transmit bets/wagers or information assisting bets/wagers “on any sporting event or contest.”
(It's legal if you are transmitting from a jurisdiction where it's legal to a jurisdiction where it's legal).
This has been upheld repeatedly for sporting events.
New york can, and did, include a claim to enjoing them from violating this act, which has absolutely no pre-emption issue because it's not a state law.
The case you cited is going to end up in the supreme court, where it will be a toss up.
(in previous supreme courts, it would be a non-starter and the third circuit would have been summarily reversed)
I don't think you're disputing that the requested order would halt Kalshi's operations nationwide for as long as Kalshi remained headquartered in NYC though? The CFTC's framing is disingenuous, presumably because they wanted to create a false impression that NY was attempting to regulate activity without any nexus in that state, but that's still the practical effect given Kalshi's current location.
That's not true at all. New York is asking the court to stop the Kalshi executives, who are located in New York, from flagrantly violating the sports gambling laws of New York. Kalshi would be free to move to another state where sports gambling is legal if they wanted to keep the platform up.
The most important lines to me are the CFTC Chairman's quote:
> These are financial exchanges that offer financial instruments and operate across state lines. They match the bid from a resident of one state with the offer of a resident from another state and submit the trade to a clearinghouse that backstops the transactions of customers throughout the country. New York has no business regulating these interstate financial markets.
If true, it seems quite irrelevant that NY is limiting its suit to NY customers. NY would be restricting trade to people in other states. (I am not a fan or user of Kalshi)
Isn't this how gambling works though? You and I place a similar value of chips on a table, then the winner walks it over to a third party (the counter at the casino) to exchange the chips for currency?
It's a relatively uncommon structure for gambling, and things that do work that way (like casual sports bets between friends) are often exempt from local gambling laws. Traditional sports betting was done directly between a gambler and their sportsbook of choice at whatever profit-maximizing odds the bookie chose.
In other parts of the world, betting exchanges like BetFair operate this way, but unlike Kalshi, there's no pretence that what's occurring is anything other than gambling, and they are heavily regulated like other sports betting operators.
In Australia, where legal online sports betting is everywhere, it's hugely unpopular with everyone except the bookmakers, TV networks (for whom betting ads during sports broadcasts are the one remaining decent revenue stream), a relatively small group of gamblers (many of whom gamble enough for it to pose serious problems for them and their families), and the nominally socially-democratic politicians running the federal government (who were more than happy to ban social media for teens despite the evidence being ambiguous at best, but are amazingly reluctant to tackle this, despite the demonstrated harm).
Put the genie back in the bottle and ban online sports betting. If somebody wants to place a bet on sport, make them physically go to a betting shop or the racetrack.
That’s pretty normal though, and has been for ages. A lot of states have random laws around the things you can sell there, even though it would prevent an out of state entity from selling the product there.
Liquor laws come to mind, you usually need special distribution stuff per state.
It would be a wild expansion of the commerce clause to prevent states from regulating what can be sold inside the state.
You are correct, but New York also apparently sees their jurisdiction as nationwide when the thing being wagered on has some proximity to the state. If you read the petition, it has language like this:
> New York also prohibits sports wagering on events in which New York college teams participate
Ultimately, this suit is about protecting state gambling taxes and incumbent casinos. I guess I don't feel a particular love for either side.
> In the lawsuit, filed on July 31, New York seeks a temporary restraining order prohibiting KalshiEX, LLC from offering all event contracts nationwide and more than $36 billion in damages.
If you go to page 29 you'll see what they requested.
The claim they are trying to prevent them from offering all event contracts nationwide is simply false. The closest anywhere is a claim to enjoin them from violating some federal criminal statutes that they would not be violating if they were not operating in new york illegally (IE do not stop them from operating nationwide).
You can also see their is no specific number on the damages. In fact, the only specific number is the request for Kalshi to pay $2000 in costs to the state of NY.
The CFTC is, understandably, relying on people not bothering to read it and so has put out an "alternate set of facts".
Edited my earlier comment to point here. Is your assessment that CFTC is pulling the broader impact fully out of the air, or are likely to try to spin the coverage of events in New York for participants outside of New York as counting as interstate commerce?
The "emergency powers" they speak of are 7 U.S.C. § 12a(9), and they are quite specific.
It gives them the authority to direct a registered entity to do a few specific things. None of those things are relevant to here. It's stuff like emergency margin requirements, position limits, etc. Not "violate state law". It gives them no power to enable a registered entity to violate a TRO, or anything like that. Such a power would have to come through pre-emption.
The CEA gives them zero authority to preempt state law directly, and any pre-emption would have to be argued to already have occurred under the Commodity Exchange Act. They'll argue it occurs because of their order, but it actually doesn't meet the requirements to do that, so then they'll argue the CEA preempts state law.
As you may imagine, this has been argued about before, for a very very very long time.
Gambling is core state police power, and has been found so many times. As such, presumptions against pre-emption would apply, etc. Even in the current court that ignores precedent, using an esoteric made-for-specific-situations emergency power statute like this one would to preempt new york/etc (this is not the only case) law would run clearly afoul of the so-called major questions doctrine.
Lastly, the current CEA regulations actually ban event contracts that are unlawful under state law (17 CFR 40.11):
Prohibition. A registered entity shall not list for trading or accept for clearing on or through the registered entity any of the following:
...
1. (1) An agreement, contract, transaction, or swap ... that involves, relates to, or references terrorism, assassination, war, gaming, or an activity that is unlawful under any State or Federal law;
So trying to pre-empt state law when the existing regulations clearly don't allow event contracts that are disallowed under state law is ... not likely to succeed.
Also note that New York has claimed a violation of the wire act in there, and in particular 18 U.S.C. § 1084(a). This is a federal statute that makes it illegal to transmit sports betting information over the wire (it's okay if it's from a jurisdiction where it's legal to a jurisdiction where it's legal). They have asked the court to enjoin them from violating this. This claim is here because it avoids all the pre-emption issues - it's a federal statute. So New York is also hedging their bets on the state preemption issue.
All that said, there is also a CFTC-designated contract market that Kalshi operates, and that they could likely exercise significantly more power over, and New York can order them around less on. But that is likely to end up in the supreme court, and harder to predict. Any other court the answer would be clear - congress doesn't have the authority to regulate purely intra-state gambling, etc.
Wanted to thank you for the highly informative breakdown, especially given we got here by me making the mistake of not pulling up the underlying complaint before commenting.
By letter dated October 24, 2025, the Gaming Commission directed Kalshi to “cease and
desist from illegally operating, advertising, promoting, administering, managing, or otherwise
making available an unlicensed mobile sports wagering platform in New York State in
connection with any sports event.”
A sibling comment has provided the source, but I want to separately emphasize that you must unlearn your instincts that the federal government wouldn't lie to you. Most government agencies are under a top-down mandate to tell lies whenever Donald Trump or someone who's bribed him would benefit.
I think the point of confusion or obfuscation is that Kalshi is headquartered in NYC, so an order prohibiting them from offering bets/contracts "within or from New York" has the effect of prohibiting them nationwide. They could move to a friendlier state, but they presumably would rather not.
I (unfortunately) think that the NY AG screwed up our opportunity to press that question by aiming nationally. The CFTC got to skip that and just shut down the national TRO.
I'd love to see another state push for a state-specific restriction and see how that plays out.
There were 3 alarmingly assertive, not even wrong in the Pauli sense, comments I saw in this thread, this being the last, and it turns out they’re all by you.
HN in general gets ahead of its skis a ton on legal stuff, it’s not personal. I deserve what I’ll get for speaking plainly to you, I hope the fact I’m speaking plainly and incurring cost will encourage you to move slightly more slowly.
In order:
Regulating interstate commerce is a fed thing, yes, that doesn’t mean states are unable to do anything at all to companies operating in multiple states. It was jarring to hear that described as one of the most settled principles we have.
NYS was not asking for a national TRO. It was jarring to read that asserted.
The first paragraph of the CFTC release we are commenting on says it ordered Kalshi to be able operate nationally. It was jarring to read it was made up that the CFTC ordered it to be able to operate.
> August 11, 2026
>
> WASHINGTON — The Commodity Futures Trading Commission today exercised its emergency authority in response to KalshiEX, LLC’s notification of a market emergency and ordered the exchange to continue to operate in accordance with the Commodity Exchange Act’s Core Principles.
The "order" there is effectively a reset button to the TRO. Its function is to say "you can ignore the TRO and continue business as usual". It doesn't force Kalshi to continue operating if they had their own reasons for pausing operations.
You are simply wrong. The order invokes statutory emergency authority to require markets to operate as before. It’s materially different from cancelling the TRO (which has not been granted)
If you read the complaint, the prayer for relief is quite clear that they only are trying to stop them from operating in new york, deliberately offering gambling to new yorkers, etc.
Am I reading this right? The state of New York wants Kalshi to stop offering prediction gambling, excuse me, "event contracts" in New York, and the federal Commodity Futures Trading Commission just ordered Kalshi to keep operating in New York regardless?
Yes. If you take Kalshi out of it, that’s exactly how the law is supposed to work.
The State of New York does not have the power to compel NYSE to stop operating in New York either, irrespective of what laws NY passed, as that is with the SEC.
They also can’t enforce a law saying companies in New York must file 10Qs every month or something. Again, federal.
See: supremacy clause, interstate commerce. (The latter has been significantly expanded beyond its ordinary meaning for centuries; in here, the theory is that New Yorkers not being able to participate in a market ‘hurts’ other interstate market participants).
It's kind of hard to take Kalshi out of this, since the whole premise for the Commodity Futures Trading Commission's authority here is that Kalshi is a commodity futures trading exchange, not a gambling site.
I think the gp just means, “if we put aside that this is a contentious company.”
I’m not sure that interstate commerce should apply here—it seems correct that a state can ban gambling, even if it is on the Internet against out-of-state US nationals—but if the CFTC is asserting its pre-emption under existing law, it needs to assert it (as it is doing so here.)
It’s pretty clear that this is (a) gambling and (b) explicitly excluded from the CFTC’s legal mandate (“gaming”), but obviously this is about corruption and not a good faith interpretation.
I expect this to go to the Supreme Court and for the Court to side with the corruption.
If Wickard v Filburn is still good law, I don’t understand how the betting market is anything but interstate commerce. Futures trading is betting, especially where they’re settled in cash.
Maybe an "event outcome prediction contract" simply ought not to be considered a "commodity" under any consistent interpretation of the law and the English fucking language.
I think the point is more "why is the outcome of an event like an election considered a commodity" and not a question of the value of event contracts?
Like, why would the same agency regulating wheat futures also be responsible for regulating event contracts? I know the simple answer is that Congress said they should be, but conceptually it's a bit odd.
I am not sure about how the state regulation of betting will turn out (though I would have guessed that it is indeed pre-empted), but the nationwide injunction seems shaky given Trump v Casa: https://www.supremecourt.gov/opinions/24pdf/24a884_8n59.pdf
I don't think Casa applies here. A nationwide injunction is not the same thing as a universal injunction. A universal injunction benefits non-parties to a case. But if an injunction, especially a TRO, requires nationwide effect to protect the interests of NY, who is a party, then that's fine. Also note that Kalshi is based in NYC, AFAIU; it's not a situation of a state court trying to control the out-of-state actions of a foreign company merely doing business in NY.
So the CFTC frames Kalshi as a financial derivatives exchange for the financial instrument category of event contracts, dismissing NYs characterization of it as a gambling/betting platform. Interesting.
What exactly is the difference between a financial derivatives exchange and a gambling platform? Both involve placing bets on uncertain future outcomes.
Traditional derivatives can be used to trade the risk that would already exist with or without the existence of the derivatives market. Prediction markets create risk out of thin air.
Insurance protects life and property (including future income). Until you wagered $100 on the Knicks winning, none of your property was threatened by them losing.
And, in fact, there is a concept called an “insurable interest” that is intended to prevent this kind of thing.
If I buy an insurance contract that will pay me if your house burns down and then I burn down your house, then I’ve obviously committed arson, but I have also likely purchased that insurance contract illegally. And I don’t even need to burn down your house for that contract to be illegal.
Of course not. If a building exists, there is a risk it burns down. Insurance just moves that risk around. The only way to eliminate the risk is to not build anything anywhere.
So what would be the difference between buying insurance against downtime of a service you depend on (eg. Cloudflare) vs making a bet on the prediction market that there will be downtime? Even without these markets there is risk that the service goes down. The existence of the prediction market doesn't cause it to be possible.
The difference seems to be that it’s insurance if you’re buying protection against your own home burning down.
Versus when you’re financially wagering that your neighbor’s house burns down. (I.e whether you get paid back if the misfortune impacts you, vs you getting paid if misfortune visits someone else.)
This is a framing that obscures rather than illuminating. Perhaps in this specific case, the prediction market bet acts as insurance (and even then, only for those market participants who are actual Cloudflare customers; many others are simply taking a bet). But the prediction market allows bets of many other kinds, many of which do not act as insurance against anything. Sports bets are the most obvious, but also election bets, bets on wars, bets on celebrities' lives, bets on show durations, bets on Jesus returning, bets on aliens existing - none of these can be construed as insurance. When the vast majority of actual bets traded on this betting market can not be construed as insurance, you can't defend the market as offering insurance.
In a similar vein, companies that run skill competitions (hole-in-one prizes, half-court shots, etc.) can and regularly do buy insurance on those events.
Under this theory, Kalshi is arguably not trading in commodities, but insurance, which is state-regulated.
Insuring against loss. I just looked up the official name; it’s called prize indemnity insurance.
In the case of those “make a free throw from half court and win a car” competitions, the risk is a known value: the prize sponsor’s wholesale vehicle cost. The sponsor pays a premium for each contest, which is calculated based on the likelihood of someone winning.
This is a very well established insurance market. You as an individual can go out and buy hole-in-one insurance. It’s more popular in Korea and Japan where there is a strong societal expectation of throwing a lavish party if one hits a hole in one. Here in the States, it’ll cover a round of drinks for the clubhouse.
In the case of the bar, the Kalshi bet is functioning as an insurance policy against a potentially open-ended loss. The bar could be packed, the U.S. wins and everyone drinks the bar dry. So Kalshi is fulfilling a legitimate business role here.
But insurance is boring and highly regulated. The bar could likely have bought an equivalent policy from an underwriter in the Financial District. Or frankly from a rich regular. Kalshi wants to make insane amounts of money from degenerate gamblers, and to be immune from state regulators who are more answerable to citizens than the CFTC commissioners. Hence adopting the fig leaf of “futures contracts.”
If you thought I’m on Kalshi’s side here, I’m definitely not.
Insurance against loss due to ... paying for insurance? The language of the thing is compelling at first glance, but it doesn't actually parse. Sharing your gambling wins with patrons to attract more patrons is not insurance.
This seems correct, even though I think it's unfortunate that these prediction markets are ruining so many people's lives.
> In the lawsuit, filed on July 31, New York seeks a temporary restraining order prohibiting KalshiEX, LLC from offering all event contracts nationwide and more than $36 billion in damages.
This seems naturally the territory of the CFTC. They have exclusive right to regulate futures and derivatives contracts, which Congress handed them. Also, it seems straightforwardly anti-commerce-clause to allow NY to prohibit Kalshi from offering these contracts nationwide.
> said Chairman Michael S. Selig. “Congress did not intend for derivatives exchanges to be regulated under a patchwork of state gaming laws.
Ah yes, "derivatives" which are "not intended to fall under gaming laws" such as... *checks Kalshi website* 58 million dollars riding on which team is the 2027 NFL champion.
Oh yeah, totally a financial derivative there, not related to gambling at all. *sigh*
ELI5 why it's better for you to place a $10,000 bet that, say, GOOG falls below $300 by February 2028, than to bet the same that the Pats win the Super Bowl? They're both gambling.
The fact that you can turn useful financial instruments into a casino isn't really a great argument for just leaning into it by abandoning all connection to any real utility.
I don't think I can make a good ELI5 argument for (or against) that one as-written, because there are multiple differences going on at the same time. For example:
1. When you "lose" shorting a stock your potential loss is infinite, because you might be on the hook to buy (and then give away) GOOG at an arbitrarily high price. In contrast, the super-bowl bet is probably a fixed amount.
2. In the opposite direction, it's hard to see how the Super Bowl bet can really be hedging to reduce how much you're relying on chance in your life... not unless you happen to own a store selling single-team merchandise and you want to limit how much money you might lose if nobody wants to buy it.
_________
P.S.: Let's flip it around: If we assume shorting GOOG is the same as sports-gambling, then why (AFAIK) has no bookie or casino ever even tried to offer the same kind of bet, where you get $X now but you're obligated to supply $THING later?
Does that absence tell us something about an important difference between them?
Options on the sports team's parent company. I mean you want to hedge against financial losses due to on-field performance but also commercial performance, right? What is the utility of hedging purely against on-field performance?
As far as I can tell, binary options on "GOOG below $300 by February 2028" do not exist in the US market. I absolutely think that single-stock binary options are terrible gambling products and should not be allowed.
The thing that I suspect you're intending to describe, a put option expiring in January 2028 (there is no such contract for February) with a break-even at $300, has a different structure which greatly increases its utility for financial purposes and greatly decreases its appeal for gambling. It's hard for a casual bettor to even identify what the correct product is (it was the $355 strike at close of market today, but it may be different tomorrow!), bets are only accepted in increments of $5,500, and your winnings may be minimal unless Google falls either more quickly or more severely. If I'm trying to hedge my Google exposure, though, I'm perfectly happy with the scenario where I didn't win much because Google didn't go down much.
It's not an order to Kalshi to continue operations. They overrode the TRO from the state court. The target of the order is the state court / executive, essentially saying "You cannot halt Kalshi's operations via the TRO".
It was never more virtuous to be options-trading GME shares on Robinhood than gambling at the dog track or betting on basketball games. The only reason some regulators are going after Kalshi or Polymarket is that the casino owners are lining these particular politicians' pockets more than the futures trading companies are.
I actually am not opinionated on it other than all kinds of gambling are basically the same -- and that includes a lot of the ways stock market is used in practice.
I do admit gambling addiction is a real thing and that this new super convenient and easy and legal option incrementally brings more people into that world of pain. But I also think it's stupid to ban gambling like they did with alcohol in the last century. It'll just put more control in the hands of the mob.
The mob. There's an organization that I bet is also eagerly lining the pockets of these "kill Kalshi" regulators.
I think you are right that it's all gambling. Kalshi seems more predatory in how it targets people. Perhaps advertising gambling in any way should be outlawed.
I agree with you that gambling on options via Robinhood is not great, but it at least theoretically has value to society and has a long history of being used by slightly more responsible entities which makes it harder to just, say, ban it out right.
Wrong. Totally. Options on GME and win/loss bets on basketball and dog racing are not the same as the level of prop bets and betting on things occuring.
“New York intends to make event contract derivatives waste away under its iron curtain of state gaming laws before the courts get the chance to issue final rulings,” said Chairman Michael S. Selig.
President Donald J. Trump nominated Michael S. Selig to serve as the 16th Chairman of the Commodity Futures Trading Commission (CFTC) on October 27, 2025. The U.S. Senate confirmed him on December 18, 2025, and he was sworn into office on December 22, 2025.
This is the time for crypto projects to enjoy Federal protection.
phenomenal and I want to address snarky comments here
the “states rights” crowd has always used laws passed by Congress, which the CEA has been. other examples such as a Supreme Court overruling itself made a national regulation fall back to the states solely because Congress has not and has never passed a law on the topic, there is insufficient consensus on proposed laws so those topics will remain at the states
in this case, the actual argument is that the case should be heard by the courts at all, and NY wanted to halt operations WHILE it was heard by the courts. CFTC overruled the pre-verdict halting
and finally, the courts of course will likely not result in anything, as the Supremacy Clause of the Constitution is clear that federal law is supreme when there is a conflict, and the CFTC chooses to leverage that
federal government can always choose to ignore a state law, as it does in some markets
It's disingenuous to pretend the current US admin prioritizes state rights or separation of powers. They have very explicitly pushed an ideology of unitary power and maximizing their control of federal agencies over congress and state powers.
That's exactly the point, yes - the Republicans have always claimed to be the party of Small Government and of States Rights while in the opposition, but in reality when they are in power they immediately act to expand federal powers, both over the states that they don't like and overall in the economy and day to day life.
The Republicans don't just control the executive, they also control both chambers of Congress (and, lets be real, the Supreme Court as well).
The fact that they don't act like it and just allow the executive to do whatever it wants doesn't absolve them of responsibility for what the executive does.
Legal filings by the State of New York indicate that this was not in fact the case and they were asking Kalshi to halt offering their product to the public in the state of NY only.
Most people invoke the "states' rights" platitude when the federal government oversteps on constitutional matters that haven't been specifically legislated. In this case, Congress already passed a law regulating these activities, and it seems pretty clear-cut that Kalshi engages in interstate commerce, so New York will likely lose if this gets to the Supreme Court.
That's not to say I think event prediction markets are good. In fact, I think they should be banned. That doesn't change my analysis of the current situation.
> In this case, Congress already passed a law regulating these activities, and it seems pretty clear-cut that Kalshi engages in interstate commerce, so New York will likely lose if this gets to the Supreme Court.
That is a wild take. Interstate regulatory power does not prevent a state from passing laws regulating things happening inside its own state.
EDIT: see DannyBee's comment below ( https://news.ycombinator.com/item?id=49266746 ). It does look like the CFTC has extrapolated the "nationwide" out of either some novel interpretation of the filing or just entirely fabricated it as their justification for their action.
I've got no love for Kalshi, but "orders Kalshi to continue operate in New York" doesn't seem to be present anywhere in the actual release.
The article presents the sequence of events as:
1. The State of NY files a lawsuit against Kalshi under the theory that it can be regulated by state gambling laws.
2. The State of NY files for a temporary restraining order requiring Kalshi to halt trading nationally, not just in NY.
3. Kalshi reaches out to the CFTC to claim that NY doesn't have the authority to regulate interstate commerce.
4. The CFTC agrees and uses their authority to override the TRO.
That seems pretty aligned with how interstate commerce is regulated and managed in the US.
I think it's good to have the official context from the state of NY as well, which argues that Kalshi meets the state's standards for gambling; has serially refused to get the required licenses, and serves customers aged 18-20 in a market where gambling is restricted by law to people over 21.
https://ag.ny.gov/press-release/2026/governor-hochul-and-att...
My impression was that NY wanted a TRO to stop Kalshi operating in New York, not nationally. A TRO seems like a rather extreme measure in that it assumes the plaintiffs win the lawsuit as a premise, but I guess that's partly a function of how long New York has been trying and failing to obtain compliance with its gaming laws, and intended to provoke a preliminary hearing into the merits of the case (vs letting the litigation drag on for years without anyhting changing).
Your claim here is wrong:
> 2. The State of NY files for a temporary restraining order requiring Kalshi to halt trading nationally, not just in NY.
The State of New York did *NOT* file a temporary restraining order, neither in NY or nationally. Please find a citation of that if you want to claim it is true.
Rather the State of New York filed suit here to stop operations in New York:
https://ag.ny.gov/press-release/2026/governor-hochul-and-att...
Specifically the lawsuit asks for:
"Permanently enjoining Respondent and its principals, agents, and employees from operating an unlawful gambling business, or otherwise advancing gambling activity, or profiting from gambling activity, within or from New York or to persons in New York, without being licensed by the New York State Gaming Commission"
That claim is coming directly from the CFTC, it is not this user's novel claim.
It seems that overall the CFTC and the NYAG are presenting materially different event time lines, so as an outsider it's a bit unclear what is actually happening.
It seems that New York is asking the court for a temporary restraining order that would prohibit Kalshi from offering all event contracts nationwide. I also have zero love for Kalshi, but I can see why such a request would be concerning, regardless of whether I think Kalshi is a degenerate trash heap.
In saying, "New York seeks a temporary restraining order prohibiting KalshiEX, LLC from offering all event contracts nationwide" the CFTC's press release substantially misrepresents the filing by the NY AG. On page 29, the filing requests "Permanently enjoining Respondent and its principals, agents, and employees from operating an unlawful gambling business, or otherwise advancing gambling activity, or profiting from gambling activity, within or from New York or to persons in New York, without being licensed by the New York State Gaming Commission" (https://ag.ny.gov/sites/default/files/court-filings/new-york...).
Since Kalshi's HQ is in NY, I guess the most charitable interpretation is that perhaps the CFTC's statement is based on the assumption granting the TRO would have the net effect of disrupting Kalshi's operations everywhere until they can serve the site from outside NY. Of course, without disclosing that extrapolation, the statement is still factually incorrect.
Setting aside that significant error, I suspect this CFTC order is an attempt to create a federal vs state conflict in the hope the judge will suspend or defer any TRO until that issue is decided. I imagine Kalshi will file a response tomorrow arguing exactly that. Ultimately, this will still come down to whether Kalshi can be regulated by states, and if so, whether it's gambling.
Yea; interstate commerce being the domain of the federal government is one of the more tested legal concepts we have here.
…And growing wheat on your own land to feed your own cattle somehow counts as interstate commerce, despite no commerce taking place and the wheat never leaving your property, let alone the state. (Wickard v. Filburn)
Wickard was growing wheat for interstate commerce. The case was about whether the additional wheat he grew for "personal" use was also part of interstate commerce.
Just around, or slightly around the level of testing that Roe vs Wade prior to Dobbs. Or a bakers dozen of other established precedents that were "one of the more tested legal concepts" until ... recently.
Unfortunately for Roe v Wade, abortion and a right to privacy aren't explicitly laid out in the Constitution. Interstate commerce is. New York would be entirely in their right to ban Kalshi in New York but not halt operations nationwide.
Generally speaking, no: there’s a significant difference in precedent between the two. IANAL, but interstate commerce is explicitly written into the Constitution as the jurisdiction of the federal government and was tested (and generally serially expanded) in court multiple times long before Roe.
hasn't stopped states from trying to impose their internet rules on visitors everywhere :/
Except it's false, they aren't requesting such a thing.
Not literally. I think the text in question is: "within or from New York or to persons in New York." Where CFTC is arguing that "from" would have interstate consequences. I'm not a legal expert, though, so I have no idea if something similar has been fought in court before.
edit
Interesting, I found KalshiEX LLC v. Flaherty [1] which seems strikingly similar to this case and was ruled in favor of Kalshi.
"The Third Circuit affirmed the District Court’s order. The appellate court held that the Commodity Exchange Act (CEA) grants the Commodity Futures Trading Commission (CFTC) exclusive jurisdiction over swaps, including sports-related event contracts traded on CFTC-licensed DCMs."
[1]: https://law.justia.com/cases/federal/appellate-courts/ca3/25...
These are the CFTC licensed contract markets, which are not the same exact thing.
I'm not sure how to explain all this without writing a 70 page dissertation on HN, and it's probably not worth it :)
Overall - this is a wildly complicated area. To give you an idea how complicated: Ignoring state law, transmitting gambling information for sports events over the wire is a federal crime. See 18 U.S.C. § 1084(a), which makes it a crime for a person “engaged in the business of betting or wagering” knowingly to use an interstate or foreign wire facility to transmit bets/wagers or information assisting bets/wagers “on any sporting event or contest.”
(It's legal if you are transmitting from a jurisdiction where it's legal to a jurisdiction where it's legal).
This has been upheld repeatedly for sporting events.
New york can, and did, include a claim to enjoing them from violating this act, which has absolutely no pre-emption issue because it's not a state law.
The case you cited is going to end up in the supreme court, where it will be a toss up. (in previous supreme courts, it would be a non-starter and the third circuit would have been summarily reversed)
I don't think you're disputing that the requested order would halt Kalshi's operations nationwide for as long as Kalshi remained headquartered in NYC though? The CFTC's framing is disingenuous, presumably because they wanted to create a false impression that NY was attempting to regulate activity without any nexus in that state, but that's still the practical effect given Kalshi's current location.
That's not true at all. New York is asking the court to stop the Kalshi executives, who are located in New York, from flagrantly violating the sports gambling laws of New York. Kalshi would be free to move to another state where sports gambling is legal if they wanted to keep the platform up.
The most important lines to me are the CFTC Chairman's quote:
> These are financial exchanges that offer financial instruments and operate across state lines. They match the bid from a resident of one state with the offer of a resident from another state and submit the trade to a clearinghouse that backstops the transactions of customers throughout the country. New York has no business regulating these interstate financial markets.
If true, it seems quite irrelevant that NY is limiting its suit to NY customers. NY would be restricting trade to people in other states. (I am not a fan or user of Kalshi)
Isn't this how gambling works though? You and I place a similar value of chips on a table, then the winner walks it over to a third party (the counter at the casino) to exchange the chips for currency?
It's a relatively uncommon structure for gambling, and things that do work that way (like casual sports bets between friends) are often exempt from local gambling laws. Traditional sports betting was done directly between a gambler and their sportsbook of choice at whatever profit-maximizing odds the bookie chose.
In other parts of the world, betting exchanges like BetFair operate this way, but unlike Kalshi, there's no pretence that what's occurring is anything other than gambling, and they are heavily regulated like other sports betting operators.
Which I think is obviously where the US is going to settle in the long term. Just a question of how many people lose their shirts before we get there.
In Australia, where legal online sports betting is everywhere, it's hugely unpopular with everyone except the bookmakers, TV networks (for whom betting ads during sports broadcasts are the one remaining decent revenue stream), a relatively small group of gamblers (many of whom gamble enough for it to pose serious problems for them and their families), and the nominally socially-democratic politicians running the federal government (who were more than happy to ban social media for teens despite the evidence being ambiguous at best, but are amazingly reluctant to tackle this, despite the demonstrated harm).
Put the genie back in the bottle and ban online sports betting. If somebody wants to place a bet on sport, make them physically go to a betting shop or the racetrack.
That’s pretty normal though, and has been for ages. A lot of states have random laws around the things you can sell there, even though it would prevent an out of state entity from selling the product there.
Liquor laws come to mind, you usually need special distribution stuff per state.
It would be a wild expansion of the commerce clause to prevent states from regulating what can be sold inside the state.
That is not true? The order was to stop them from operating in the state.
You are correct, but New York also apparently sees their jurisdiction as nationwide when the thing being wagered on has some proximity to the state. If you read the petition, it has language like this:
> New York also prohibits sports wagering on events in which New York college teams participate
Ultimately, this suit is about protecting state gambling taxes and incumbent casinos. I guess I don't feel a particular love for either side.
Do you have a source for that? From the release:
> In the lawsuit, filed on July 31, New York seeks a temporary restraining order prohibiting KalshiEX, LLC from offering all event contracts nationwide and more than $36 billion in damages.
Lawyer here:
https://ag.ny.gov/sites/default/files/court-filings/new-york...
This is the complaint.
If you go to page 29 you'll see what they requested.
The claim they are trying to prevent them from offering all event contracts nationwide is simply false. The closest anywhere is a claim to enjoin them from violating some federal criminal statutes that they would not be violating if they were not operating in new york illegally (IE do not stop them from operating nationwide).
You can also see their is no specific number on the damages. In fact, the only specific number is the request for Kalshi to pay $2000 in costs to the state of NY.
The CFTC is, understandably, relying on people not bothering to read it and so has put out an "alternate set of facts".
Edited my earlier comment to point here. Is your assessment that CFTC is pulling the broader impact fully out of the air, or are likely to try to spin the coverage of events in New York for participants outside of New York as counting as interstate commerce?
Oh worse than that.
The "emergency powers" they speak of are 7 U.S.C. § 12a(9), and they are quite specific.
It gives them the authority to direct a registered entity to do a few specific things. None of those things are relevant to here. It's stuff like emergency margin requirements, position limits, etc. Not "violate state law". It gives them no power to enable a registered entity to violate a TRO, or anything like that. Such a power would have to come through pre-emption.
The CEA gives them zero authority to preempt state law directly, and any pre-emption would have to be argued to already have occurred under the Commodity Exchange Act. They'll argue it occurs because of their order, but it actually doesn't meet the requirements to do that, so then they'll argue the CEA preempts state law.
As you may imagine, this has been argued about before, for a very very very long time.
Gambling is core state police power, and has been found so many times. As such, presumptions against pre-emption would apply, etc. Even in the current court that ignores precedent, using an esoteric made-for-specific-situations emergency power statute like this one would to preempt new york/etc (this is not the only case) law would run clearly afoul of the so-called major questions doctrine.
Lastly, the current CEA regulations actually ban event contracts that are unlawful under state law (17 CFR 40.11):
https://www.law.cornell.edu/cfr/text/17/40.11
Prohibition. A registered entity shall not list for trading or accept for clearing on or through the registered entity any of the following: ...
1. (1) An agreement, contract, transaction, or swap ... that involves, relates to, or references terrorism, assassination, war, gaming, or an activity that is unlawful under any State or Federal law;
So trying to pre-empt state law when the existing regulations clearly don't allow event contracts that are disallowed under state law is ... not likely to succeed.
Also note that New York has claimed a violation of the wire act in there, and in particular 18 U.S.C. § 1084(a). This is a federal statute that makes it illegal to transmit sports betting information over the wire (it's okay if it's from a jurisdiction where it's legal to a jurisdiction where it's legal). They have asked the court to enjoin them from violating this. This claim is here because it avoids all the pre-emption issues - it's a federal statute. So New York is also hedging their bets on the state preemption issue.
All that said, there is also a CFTC-designated contract market that Kalshi operates, and that they could likely exercise significantly more power over, and New York can order them around less on. But that is likely to end up in the supreme court, and harder to predict. Any other court the answer would be clear - congress doesn't have the authority to regulate purely intra-state gambling, etc.
Wanted to thank you for the highly informative breakdown, especially given we got here by me making the mistake of not pulling up the underlying complaint before commenting.
Very high value comments throughout the thread, thank you.
What consequences, if any, could the CFTC face for this?
I think what the CFTC are arguing is that offering contracts in 49 states (everywhere except New York) is not "Nationwide".
So yes, technically the restraining order is preventing Kalshi from offering Nationwide contracts.
I mean, the filing?
By letter dated October 24, 2025, the Gaming Commission directed Kalshi to “cease and desist from illegally operating, advertising, promoting, administering, managing, or otherwise making available an unlicensed mobile sports wagering platform in New York State in connection with any sports event.”
https://ag.ny.gov/sites/default/files/court-filings/kalshiex...
A sibling comment has provided the source, but I want to separately emphasize that you must unlearn your instincts that the federal government wouldn't lie to you. Most government agencies are under a top-down mandate to tell lies whenever Donald Trump or someone who's bribed him would benefit.
“Assumption of regularity” isn’t. Under this plutocratic corrupt regime
I think the point of confusion or obfuscation is that Kalshi is headquartered in NYC, so an order prohibiting them from offering bets/contracts "within or from New York" has the effect of prohibiting them nationwide. They could move to a friendlier state, but they presumably would rather not.
I think the question is whether or not this is damaging to the case that the Kalshi and others could be regulated state by state..
I (unfortunately) think that the NY AG screwed up our opportunity to press that question by aiming nationally. The CFTC got to skip that and just shut down the national TRO.
I'd love to see another state push for a state-specific restriction and see how that plays out.
Except they haven't, because they did not request national relief. They requested state-specific relief.
I see lots of back and forth over this very important point, which has to be either true or false. Can you point to sources?
https://ag.ny.gov/sites/default/files/court-filings/new-york...
See page 29
There were 3 alarmingly assertive, not even wrong in the Pauli sense, comments I saw in this thread, this being the last, and it turns out they’re all by you.
HN in general gets ahead of its skis a ton on legal stuff, it’s not personal. I deserve what I’ll get for speaking plainly to you, I hope the fact I’m speaking plainly and incurring cost will encourage you to move slightly more slowly.
In order:
Regulating interstate commerce is a fed thing, yes, that doesn’t mean states are unable to do anything at all to companies operating in multiple states. It was jarring to hear that described as one of the most settled principles we have.
NYS was not asking for a national TRO. It was jarring to read that asserted.
The first paragraph of the CFTC release we are commenting on says it ordered Kalshi to be able operate nationally. It was jarring to read it was made up that the CFTC ordered it to be able to operate.
What? It’s in the first paragraph.
Further, the operative document that this press release is about is titled “ORDER DIRECTING KALSHI TO CONTINUE EXERCISING DCM FUNCTIONS”: https://www.cftc.gov/media/14471/OGC_MarketEmergencyDeclarat...The "order" there is effectively a reset button to the TRO. Its function is to say "you can ignore the TRO and continue business as usual". It doesn't force Kalshi to continue operating if they had their own reasons for pausing operations.
You are simply wrong. The order invokes statutory emergency authority to require markets to operate as before. It’s materially different from cancelling the TRO (which has not been granted)
The order actually does legally require Kalshi to continue operating, and unless they successfully appeal, Kalshi would be breaking federal law.
Market regulators do have this power.
2 is false, actually.
If you read the complaint, the prayer for relief is quite clear that they only are trying to stop them from operating in new york, deliberately offering gambling to new yorkers, etc.
There is no relief requested nationwide.
Isn't the act of not offering something in NY = to not offering it nationwide?
Am I reading this right? The state of New York wants Kalshi to stop offering prediction gambling, excuse me, "event contracts" in New York, and the federal Commodity Futures Trading Commission just ordered Kalshi to keep operating in New York regardless?
Yes. If you take Kalshi out of it, that’s exactly how the law is supposed to work.
The State of New York does not have the power to compel NYSE to stop operating in New York either, irrespective of what laws NY passed, as that is with the SEC.
They also can’t enforce a law saying companies in New York must file 10Qs every month or something. Again, federal.
See: supremacy clause, interstate commerce. (The latter has been significantly expanded beyond its ordinary meaning for centuries; in here, the theory is that New Yorkers not being able to participate in a market ‘hurts’ other interstate market participants).
It's kind of hard to take Kalshi out of this, since the whole premise for the Commodity Futures Trading Commission's authority here is that Kalshi is a commodity futures trading exchange, not a gambling site.
I think the gp just means, “if we put aside that this is a contentious company.”
I’m not sure that interstate commerce should apply here—it seems correct that a state can ban gambling, even if it is on the Internet against out-of-state US nationals—but if the CFTC is asserting its pre-emption under existing law, it needs to assert it (as it is doing so here.)
It’s pretty clear that this is (a) gambling and (b) explicitly excluded from the CFTC’s legal mandate (“gaming”), but obviously this is about corruption and not a good faith interpretation.
I expect this to go to the Supreme Court and for the Court to side with the corruption.
If Wickard v Filburn is still good law, I don’t understand how the betting market is anything but interstate commerce. Futures trading is betting, especially where they’re settled in cash.
Maybe an "event outcome prediction contract" simply ought not to be considered a "commodity" under any consistent interpretation of the law and the English fucking language.
I think it should be well defined. I personally think prediction markets for say, federal and state elections, are a net benefit.
It provides another source off information, and there’s much less insider trading risk.
“”Event outcome prediction contracts”” on sports, clinical trials, is late stage capitalism, and yes, bullshit.
I think the point is more "why is the outcome of an event like an election considered a commodity" and not a question of the value of event contracts?
Like, why would the same agency regulating wheat futures also be responsible for regulating event contracts? I know the simple answer is that Congress said they should be, but conceptually it's a bit odd.
When can I take delivery of my 2026 NBA Knicks team, that I purchased through the commodity futures market? I'm available Friday.
Prediction gambling excuse me event contracts excuse me insider trading excuse me that’s the whole point of prediction markets
Here is a link to a post about the State of New York's case: https://www.shb.com/intelligence/newsletters/securities-liti...
I am not sure about how the state regulation of betting will turn out (though I would have guessed that it is indeed pre-empted), but the nationwide injunction seems shaky given Trump v Casa: https://www.supremecourt.gov/opinions/24pdf/24a884_8n59.pdf
I don't think Casa applies here. A nationwide injunction is not the same thing as a universal injunction. A universal injunction benefits non-parties to a case. But if an injunction, especially a TRO, requires nationwide effect to protect the interests of NY, who is a party, then that's fine. Also note that Kalshi is based in NYC, AFAIU; it's not a situation of a state court trying to control the out-of-state actions of a foreign company merely doing business in NY.
Donald Trump Jr is a “strategic advisor” at Kalshi and was given equity in the company. Hope that helps.
So the CFTC frames Kalshi as a financial derivatives exchange for the financial instrument category of event contracts, dismissing NYs characterization of it as a gambling/betting platform. Interesting.
What exactly is the difference between a financial derivatives exchange and a gambling platform? Both involve placing bets on uncertain future outcomes.
Traditional derivatives can be used to trade the risk that would already exist with or without the existence of the derivatives market. Prediction markets create risk out of thin air.
Do you think insurance markets create risk out of thin air too?
Insurance protects life and property (including future income). Until you wagered $100 on the Knicks winning, none of your property was threatened by them losing.
No.
And, in fact, there is a concept called an “insurable interest” that is intended to prevent this kind of thing.
If I buy an insurance contract that will pay me if your house burns down and then I burn down your house, then I’ve obviously committed arson, but I have also likely purchased that insurance contract illegally. And I don’t even need to burn down your house for that contract to be illegal.
(IANAL)
Of course not. If a building exists, there is a risk it burns down. Insurance just moves that risk around. The only way to eliminate the risk is to not build anything anywhere.
So what would be the difference between buying insurance against downtime of a service you depend on (eg. Cloudflare) vs making a bet on the prediction market that there will be downtime? Even without these markets there is risk that the service goes down. The existence of the prediction market doesn't cause it to be possible.
The difference seems to be that it’s insurance if you’re buying protection against your own home burning down.
Versus when you’re financially wagering that your neighbor’s house burns down. (I.e whether you get paid back if the misfortune impacts you, vs you getting paid if misfortune visits someone else.)
This is a framing that obscures rather than illuminating. Perhaps in this specific case, the prediction market bet acts as insurance (and even then, only for those market participants who are actual Cloudflare customers; many others are simply taking a bet). But the prediction market allows bets of many other kinds, many of which do not act as insurance against anything. Sports bets are the most obvious, but also election bets, bets on wars, bets on celebrities' lives, bets on show durations, bets on Jesus returning, bets on aliens existing - none of these can be construed as insurance. When the vast majority of actual bets traded on this betting market can not be construed as insurance, you can't defend the market as offering insurance.
>many others are simply taking a bet
Which can provide much needed liquidity to the market.
There is no risk to me if the rockets lose their next game. Unless I bet $100 on them winning, then a risk appears.
If you’re a Houston bar owner dependent on post game traffic, there would be risk of them losing.
There are a thousand of exchanges that have no risk on my life, but that doesn’t mean they don’t impact others.
A bar here in SF made local news for using Kalshi for just this purpose: https://sfstandard.com/2026/07/06/san-francisco-world-cup-ka...
In a similar vein, companies that run skill competitions (hole-in-one prizes, half-court shots, etc.) can and regularly do buy insurance on those events.
Under this theory, Kalshi is arguably not trading in commodities, but insurance, which is state-regulated.
These dishonest word games are silly. Insuring against what?
Insuring against loss. I just looked up the official name; it’s called prize indemnity insurance.
In the case of those “make a free throw from half court and win a car” competitions, the risk is a known value: the prize sponsor’s wholesale vehicle cost. The sponsor pays a premium for each contest, which is calculated based on the likelihood of someone winning.
This is a very well established insurance market. You as an individual can go out and buy hole-in-one insurance. It’s more popular in Korea and Japan where there is a strong societal expectation of throwing a lavish party if one hits a hole in one. Here in the States, it’ll cover a round of drinks for the clubhouse.
In the case of the bar, the Kalshi bet is functioning as an insurance policy against a potentially open-ended loss. The bar could be packed, the U.S. wins and everyone drinks the bar dry. So Kalshi is fulfilling a legitimate business role here.
But insurance is boring and highly regulated. The bar could likely have bought an equivalent policy from an underwriter in the Financial District. Or frankly from a rich regular. Kalshi wants to make insane amounts of money from degenerate gamblers, and to be immune from state regulators who are more answerable to citizens than the CFTC commissioners. Hence adopting the fig leaf of “futures contracts.”
If you thought I’m on Kalshi’s side here, I’m definitely not.
Insurance against loss due to ... paying for insurance? The language of the thing is compelling at first glance, but it doesn't actually parse. Sharing your gambling wins with patrons to attract more patrons is not insurance.
If I have an insurable interest in Cloudflare’s uptime, I may buy insurance. If not, I may not.
(IANAL. In the US this seems to largely be a state law issue. California’s law, to my quick non-expert skimming, is really quite clear on this point.)
Regulations, skill, and access.
One is when the president's son is a strategic advisor to the company and the other is a gambling platform
Laws are for poor people
no, it frames it as a grift economy subsidy.
Friends in high places are worth their weight in gold. Anyone want to bet on how much they weigh?
I mean, officially 225, but does anyone believe that?
(Which is a bit over $15M at today’s spot prices, by the by)
Americans’ continued ability to gamble, err…, trade multi-leg parlays is a matter of national security!
With “Chevron Deference” struck down, I assume this means the courts will get to decide if it is in fact gambling or not?
Here is something to bet on
https://www.ncsl.org/financial-services/prediction-markets-2...
Would Kalshi allow people to bet on whether Kalshi will be banned in a particular state
This seems correct, even though I think it's unfortunate that these prediction markets are ruining so many people's lives.
> In the lawsuit, filed on July 31, New York seeks a temporary restraining order prohibiting KalshiEX, LLC from offering all event contracts nationwide and more than $36 billion in damages.
This seems naturally the territory of the CFTC. They have exclusive right to regulate futures and derivatives contracts, which Congress handed them. Also, it seems straightforwardly anti-commerce-clause to allow NY to prohibit Kalshi from offering these contracts nationwide.
> said Chairman Michael S. Selig. “Congress did not intend for derivatives exchanges to be regulated under a patchwork of state gaming laws.
Ah yes, "derivatives" which are "not intended to fall under gaming laws" such as... *checks Kalshi website* 58 million dollars riding on which team is the 2027 NFL champion.
Oh yeah, totally a financial derivative there, not related to gambling at all. *sigh*
Totally a financial derivative for Mattress Mack, but probably not for the rest of us.
ELI5 why it's better for you to place a $10,000 bet that, say, GOOG falls below $300 by February 2028, than to bet the same that the Pats win the Super Bowl? They're both gambling.
The fact that you can turn useful financial instruments into a casino isn't really a great argument for just leaning into it by abandoning all connection to any real utility.
I don't think I can make a good ELI5 argument for (or against) that one as-written, because there are multiple differences going on at the same time. For example:
1. When you "lose" shorting a stock your potential loss is infinite, because you might be on the hook to buy (and then give away) GOOG at an arbitrarily high price. In contrast, the super-bowl bet is probably a fixed amount.
2. In the opposite direction, it's hard to see how the Super Bowl bet can really be hedging to reduce how much you're relying on chance in your life... not unless you happen to own a store selling single-team merchandise and you want to limit how much money you might lose if nobody wants to buy it.
_________
P.S.: Let's flip it around: If we assume shorting GOOG is the same as sports-gambling, then why (AFAIK) has no bookie or casino ever even tried to offer the same kind of bet, where you get $X now but you're obligated to supply $THING later?
Does that absence tell us something about an important difference between them?
There's a legitimate, non-gambling use case: hedging against your existing position in GOOG.
There's no equivalent instrument for sports.
> There's no equivalent instrument for sports.
Options on the sports team's parent company. I mean you want to hedge against financial losses due to on-field performance but also commercial performance, right? What is the utility of hedging purely against on-field performance?
That sounds _exactly_ like a gambling use case.
As far as I can tell, binary options on "GOOG below $300 by February 2028" do not exist in the US market. I absolutely think that single-stock binary options are terrible gambling products and should not be allowed.
The thing that I suspect you're intending to describe, a put option expiring in January 2028 (there is no such contract for February) with a break-even at $300, has a different structure which greatly increases its utility for financial purposes and greatly decreases its appeal for gambling. It's hard for a casual bettor to even identify what the correct product is (it was the $355 strike at close of market today, but it may be different tomorrow!), bets are only accepted in increments of $5,500, and your winnings may be minimal unless Google falls either more quickly or more severely. If I'm trying to hedge my Google exposure, though, I'm perfectly happy with the scenario where I didn't win much because Google didn't go down much.
An order to _continue_ operation? Has that ever happened before?
It's not an order to Kalshi to continue operations. They overrode the TRO from the state court. The target of the order is the state court / executive, essentially saying "You cannot halt Kalshi's operations via the TRO".
If you're a market maker? It's the whole job. They're Federally regulated to do precisely that.
I'm with the state of NY on the merits here. They're basically BetFair, and they should be subject to regulation like it.
Sadly for you, this SCOTUS is not a meritocracy.
The US SCOTUS is the single best argument against putting too much into a written constitution.
It was never more virtuous to be options-trading GME shares on Robinhood than gambling at the dog track or betting on basketball games. The only reason some regulators are going after Kalshi or Polymarket is that the casino owners are lining these particular politicians' pockets more than the futures trading companies are.
I actually am not opinionated on it other than all kinds of gambling are basically the same -- and that includes a lot of the ways stock market is used in practice.
I do admit gambling addiction is a real thing and that this new super convenient and easy and legal option incrementally brings more people into that world of pain. But I also think it's stupid to ban gambling like they did with alcohol in the last century. It'll just put more control in the hands of the mob.
The mob. There's an organization that I bet is also eagerly lining the pockets of these "kill Kalshi" regulators.
I think you are right that it's all gambling. Kalshi seems more predatory in how it targets people. Perhaps advertising gambling in any way should be outlawed.
I agree with you that gambling on options via Robinhood is not great, but it at least theoretically has value to society and has a long history of being used by slightly more responsible entities which makes it harder to just, say, ban it out right.
Betting on the superbowl winner is none of that.
Wrong. Totally. Options on GME and win/loss bets on basketball and dog racing are not the same as the level of prop bets and betting on things occuring.
Totally completely wrong.
Can't New York go after payment processors and stop anyone from paying them money or people cashing out?
Firefox says "Error Code: SEC_ERROR_UNKNOWN_ISSUER" for that CFTC link (untrusted certificate issued by Avast in Prague) and won't open the site
Not seeing that here; is your connection being MITM'd?
Issuer I'm seeing is Sectigo Public Server Authentication CA OV R36.
Avast is nominally an AV/VPN company; are you running their tooling on your machine?
The cert I am seeing:
Are you seeing that too? This [1] is the function I am using. Claude's Improved version over my old chicken scratch.Qualys Results [2] for www.cftc.gov Cloudflare in front of Drupal 11
[1] - https://nochan.net/b/Text-Crap/function_fingerprint2.sh
[2] - https://www.ssllabs.com/ssltest/analyze.html?d=www.cftc.gov&...
Laughable excuse for a country that will declare a gambling company systemically important to the economy.
“New York intends to make event contract derivatives waste away under its iron curtain of state gaming laws before the courts get the chance to issue final rulings,” said Chairman Michael S. Selig.
President Donald J. Trump nominated Michael S. Selig to serve as the 16th Chairman of the Commodity Futures Trading Commission (CFTC) on October 27, 2025. The U.S. Senate confirmed him on December 18, 2025, and he was sworn into office on December 22, 2025.
This is the time for crypto projects to enjoy Federal protection.
phenomenal and I want to address snarky comments here
the “states rights” crowd has always used laws passed by Congress, which the CEA has been. other examples such as a Supreme Court overruling itself made a national regulation fall back to the states solely because Congress has not and has never passed a law on the topic, there is insufficient consensus on proposed laws so those topics will remain at the states
in this case, the actual argument is that the case should be heard by the courts at all, and NY wanted to halt operations WHILE it was heard by the courts. CFTC overruled the pre-verdict halting
and finally, the courts of course will likely not result in anything, as the Supremacy Clause of the Constitution is clear that federal law is supreme when there is a conflict, and the CFTC chooses to leverage that
federal government can always choose to ignore a state law, as it does in some markets
Wait, so all that Republican talk of support for state's rights was really just all about the racism this whole time? Shocker.
It's disingenuous to pretend the current US admin prioritizes state rights or separation of powers. They have very explicitly pushed an ideology of unitary power and maximizing their control of federal agencies over congress and state powers.
That's exactly the point, yes - the Republicans have always claimed to be the party of Small Government and of States Rights while in the opposition, but in reality when they are in power they immediately act to expand federal powers, both over the states that they don't like and overall in the economy and day to day life.
The Republicans don't just control the executive, they also control both chambers of Congress (and, lets be real, the Supreme Court as well).
The fact that they don't act like it and just allow the executive to do whatever it wants doesn't absolve them of responsibility for what the executive does.
I hope the Kalshi executives remember that New York state police do not report to the CFTC and are not bound by its orders!
Just listen to the overwhelming silence from the “states’ rights” crowd.
This has little to do with NY governing NY. NY was attempting to govern Kalshi in other states, which it doesn't have the authority to do.
Legal filings by the State of New York indicate that this was not in fact the case and they were asking Kalshi to halt offering their product to the public in the state of NY only.
False: https://news.ycombinator.com/item?id=49266746
Kalshi is a NY company, why can't the NY AG govern what businesses in NY do again?
Most people invoke the "states' rights" platitude when the federal government oversteps on constitutional matters that haven't been specifically legislated. In this case, Congress already passed a law regulating these activities, and it seems pretty clear-cut that Kalshi engages in interstate commerce, so New York will likely lose if this gets to the Supreme Court.
That's not to say I think event prediction markets are good. In fact, I think they should be banned. That doesn't change my analysis of the current situation.
> In this case, Congress already passed a law regulating these activities, and it seems pretty clear-cut that Kalshi engages in interstate commerce, so New York will likely lose if this gets to the Supreme Court.
That is a wild take. Interstate regulatory power does not prevent a state from passing laws regulating things happening inside its own state.