Judge Analisa Torres, the same jurist who ruled that XRP sales on exchanges were not securities transactions, has denied Kalshi a preliminary injunction against New York gaming regulators. She found that the state’s gambling laws are not preempted by federal commodities law, a denial that allows the case to proceed to the motion-to-dismiss stage.
U.S. District Judge Analisa Torres denied prediction market exchange Kalshi a preliminary injunction against New York gaming regulators. She held that New York’s gambling laws, as applied to Kalshi’s sports event contracts, are not preempted by the Commodity Exchange Act (CEA) — the federal statute Kalshi has leaned on in courtrooms across the country.
The denial pushes the case to the motion-to-dismiss stage, leaving the exchange without the legal shield it has won in several other states. Gaming law attorney Daniel Wallach called the outcome “a major, major loss” and said it could carry implications for Kalshi’s other pending cases, including in Connecticut.
The Ripple judge takes on prediction markets
Torres previously presided over the SEC’s lawsuit against Ripple, issuing the 2023 decision that XRP sales on exchanges did not constitute securities transactions. That framework held until regulators formally recognized XRP‘s non-security status this March.
Her latest ruling lands in KalshiEX LLC v. Williams, the case Kalshi filed in the Southern District of New York on October 27, 2025. Kalshi sued days after the state’s Gaming Commission ordered it to stop offering sports-based event contracts to New Yorkers without a sports wagering license. The exchange argued that its contracts trade on a federally designated exchange overseen exclusively by the Commodity Futures Trading Commission (CFTC), placing them beyond state regulators’ reach.
Torres was unpersuaded that federal law displaces the state’s gambling statutes at this stage. That finding does not end the case, and Kalshi can still prevail on the merits or appeal. Yet it strips the exchange of interim protection and hands state regulators their most significant courtroom win yet in the Second Circuit.
A deepening judicial split
The decision sharpens a divide among federal courts. In April, the Third Circuit affirmed a preliminary injunction blocking New Jersey regulators from enforcing state gaming law against Kalshi, reasoning that the CFTC’s jurisdiction over exchange-traded event contracts is likely exclusive. Maryland, by contrast, denied Kalshi’s mirrored request, and Torres has now added New York to the states where preemption arguments have faltered.
The stakes are rising. Kalshi posted a record $31 billion in trading volume in June, fueled by a World Cup betting boom, even as more states move toward felony-level enforcement against unlicensed sports wagering. The prediction market sector as a whole pushed monthly taker volume to $8.6 billion in April, with Kalshi overtaking rival Polymarket for the top spot.
Source: Bitcoin News
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