This federal intervention follows a lawsuit filed by New York Attorney General Letitia James in late July, which sought to shutter the platform within the state.
Kalshi requested assistance from the federal regulator after a judge denied the company’s initial attempt to block the state's legal action.
The dispute highlights a deepening jurisdictional conflict over the nature of prediction markets, which allow users to trade on the outcome of future events.
New York officials argue these platforms function as unlicensed gambling services that bypass state taxes and regulations designed to fund public schools and addiction treatment.
Conversely, the CFTC maintains that because these markets offer swaps—a type of derivative contract used to hedge risk or speculate—they fall under federal oversight rather than a patchwork of state-level gaming laws.
The outcome of this standoff will determine whether financial exchanges operating across state lines must comply with individual state gambling commissions or a single federal standard.
While Kalshi has moved to transfer the state’s lawsuit to federal court, it has faced similar challenges elsewhere; the company recently had to unwind trades in Michigan following a court order there.
For now, the CFTC order ensures that New York residents can continue using the platform while the legal battle over regulatory authority proceeds in court.