New York has spent most of 2026 trying to shut Kalshi out of the state. In August, federal regulators stepped in and told Kalshi to keep operating anyway. If you’re a New York resident with a Kalshi account, or thinking about opening one, here’s what actually changed and what didn’t.
What New York Is Arguing
New York’s case against Kalshi centers on sports event contracts — markets where users trade on the outcome of games. The state’s gaming regulator sent Kalshi a cease-and-desist letter earlier this year, arguing those contracts amount to sports betting and require a New York gambling license.
On July 31, 2026, New York Attorney General Letitia James escalated the fight with a lawsuit accusing Kalshi of running an illegal gambling operation. The suit asks a state court to block Kalshi from operating and seeks restitution, disgorgement of profits, and civil penalties the AG’s office put at more than $36 billion.
Why the CFTC Got Involved
Kalshi isn’t a state-licensed betting site. It’s registered with the Commodity Futures Trading Commission as a federally regulated exchange, the same type of oversight that applies to commodity and futures markets. That’s the core of the jurisdictional fight: New York says its contracts are gambling under state law, while Kalshi and the CFTC say federal commodities law controls instead.
On August 11, 2026, the CFTC used a rarely invoked emergency power to order Kalshi to keep functioning as an exchange while the New York case plays out. The agency argued that letting a single state court shut down a nationally registered exchange would disrupt trading for users everywhere, not just in New York. Reporting on the order noted the CFTC has used this specific power only a handful of times since the agency was created, and hadn’t used it since 1980.
Can You Still Use Kalshi in New York?
Yes, for now. The CFTC’s order directs Kalshi to keep operating under its normal rules while the state lawsuit continues. Accounts, deposits, and trading haven’t changed for New York users as a result of this order.
The order doesn’t settle the underlying dispute. It’s not a court ruling that federal law overrides New York’s gambling law — it’s a temporary instruction to keep the exchange running while the two sides argue that question in court. A federal judge already declined to block New York’s enforcement efforts once before, in a separate ruling on July 8, 2026, so the state’s case is far from dead.
What to Watch Next
The practical outcome depends on how a court eventually resolves the same question that’s come up around Polymarket’s US legal status: does a federally registered exchange get to operate nationwide, or can individual states carve out their own rules for event contracts? Kalshi and New York are effectively litigating that question right now, and the answer will shape how every prediction market platform treats state-level restrictions going forward.
If you’re comparing Kalshi to alternatives while this plays out, it’s worth understanding how the two biggest platforms differ in structure and regulation — our Polymarket vs Kalshi comparison breaks down the key differences.
The Short Version
Kalshi remains open to New York residents today because the CFTC ordered it to stay open. New York’s lawsuit is still active, and the core legal question — state gambling law versus federal commodities law — hasn’t been decided by a court. Anyone trading on Kalshi from New York should treat this as an ongoing legal fight, not a resolved one, and keep an eye on court filings rather than assuming the current setup is permanent.
