Is Kalshi legal in New York?

Attorney General Letitia James filed a verified petition against KalshiEX LLC on July 31, 2026, in New York County Supreme Court, under Executive Law § 63(12) (p.1, ¶1). The only respondent is KalshiEX LLC, a Delaware company the petition places in New York City (p.4, ¶15). The petition's theory, in its words, is "Each contract is a bet" (p.12, ¶45), and it says Kalshi "is not licensed with the New York State Gaming Commission in any capacity" (p.2, ¶10). It lists seven violations: Article I, § 9 of the state constitution; Penal Law §§ 225.05, 225.10 and 225.20; Racing Law § 1367(16)(a), § 1367-a(2)(a) and § 1367-a(4)(b); and the federal Wire Act (pp.2-3, ¶12). The attorney general's announcement describes it as seeking a court order stopping Kalshi from operating as an unlicensed gambling business.

Kalshi filed a notice of removal the same day, moving the case to federal court in Manhattan as People v. KalshiEX, No. 1:26-cv-06550 (ECF 1, p.1). It told the court that no other process, pleadings or orders had been filed in the state case (p.4, ¶5). The attorney general's proposed order to show cause, which sought a temporary restraining order, sits in the federal record unsigned: the judge's name, the date and the signature lines are blank. We found no restraining order, injunction or stay in the federal case.

Judge Analisa Torres, who has Kalshi's own suit against the Gaming Commission, declined the case as unrelated on August 10, 2026, and it went to Judge Vernon S. Broderick. The attorney general moved on August 7 to send it back to state court and asked for fees under 28 U.S.C. § 1447(c) (memo). Kalshi opposed on August 21, and the attorney general replied on August 28. We found no ruling, though the docket we read, CourtListener, can lag the court's own system.

How far the requested injunction reaches is disputed, so here is its text. It asks the court to bar Kalshi from "operating a business that offers contracts relating to sports, culture, elections, and other events" without Gaming Commission licenses, "within or from New York or to persons in New York" (petition p.29, A.a). Kalshi says it "reaches every event contract product offered for sale on Kalshi's exchange" (ECF 21, p.21), and the CFTC describes it as reaching all event contracts nationwide. The attorney general says it "would not prevent Kalshi from offering commodity futures or swap contracts that do not run afoul of federal or state law" (ECF 22, p.2).

No order or filing we found addresses withdrawals, deposits or open positions for New York customers. The petition and the federal filings we searched are silent on all three.

Two of the attorney general's requests would reach customers if a court granted them: an accounting identifying each customer and what they lost, and "full restitution to customers who have engaged in betting" (petition p.30, C and D). No court has granted either. The CFTC's order says New York's proposed restraining order "would likely require Kalshi to liquidate all open trading positions" (p.8), which is the CFTC's prediction of what such an order would do. We found no restraining order.

Kalshi's own federal suit against the Gaming Commission and eight officials, KalshiEX v. Williams, is a separate case from the attorney general's. On July 7, 2026, Judge Torres denied Kalshi's motion for a preliminary injunction (opinion). She held New York's gambling laws not preempted by the Commodity Exchange Act as applied to Kalshi's sports-event contracts (p.8), found neither field nor conflict preemption likely (p.15), and weighed all four injunction factors against Kalshi (pp.19-21). She assumed without deciding that the contracts are swaps (p.11). The opinion says nothing about other categories, and it is a ruling at the preliminary stage, not a final judgment.

Kalshi appealed to the Second Circuit (No. 26-1835). Judge Torres denied an injunction pending appeal on July 27, 2026. On July 29 a single Second Circuit judge denied temporary administrative relief and referred Kalshi's motion for an injunction to a three-judge panel; we found no panel ruling. Kalshi filed its opening brief on August 31, and the court ordered New York's brief by October 30, 2026, or the appeal goes to a merits panel. On October 21 the court placed Kalshi's motion for an injunction pending appeal on its calendar for argument on November 3, 2026; the notice names no judges. We found no argument date for the appeal itself.

The federal appeals courts that have ruled disagree. The Third Circuit ruled for Kalshi on April 6, 2026 (No. 25-1922). The Ninth Circuit ruled for Nevada on sports contracts on August 28 (No. 25-7516) and sent election contracts back to the district court, and the Sixth Circuit ruled for Ohio and Tennessee on September 25 (Nos. 26-3196 and 26-5235). All three are rulings on federal commodities law at the preliminary-injunction stage, not tax rulings. The question is open, and petitions asking the Supreme Court to take it were pending as of October 19, 2026. Kalshi at the Supreme Court follows the petitions, and is Kalshi gambling? sets out both sides.

Kalshi's position, wherever states have challenged it, is that its contracts are derivatives on a CFTC-designated contract market, regulated by federal law rather than state gambling law. The CFTC has acted in two ways.

On August 11, 2026, it ordered Kalshi to "continue to perform its functions as an exchange" under its normal practices (p.10), after Kalshi told it a New York restraining order would require refunds and disgorgement. We found no withdrawal or stay of the order. The CFTC has also sued New York, in United States v. State of New York, No. 1:26-cv-03404, before Judge Lorna Schofield. Judge Jed Rakoff denied its request for a temporary restraining order from the bench on July 31, 2026. We found no ruling on its motion for a preliminary injunction (docket).

On October 9, 2026 the CFTC published two rules. One is a proposal, which is not in force, that would define certain event contracts, sports included, as swaps. The other is an interim final rule saying casino-style gambling products are not derivatives; the release says it takes effect on publication in the Federal Register, and we did not confirm a publication date. The docket in the New York case lists notices attaching both on October 16.

The attorney general's position is that the August 11 order is "immaterial" to Kalshi's appeal (Second Circuit Dkt. 40, p.1). No court has issued a final ruling on whether federal law lets New York enforce its gambling laws against Kalshi; the July 7 ruling covers sports contracts, is preliminary and is on appeal.

Besides the attorney general's case, four other New York matters touch Kalshi.

The Gaming Commission. Its October 24, 2025 cease-and-desist covered sports wagering only, and on October 28, 2025 it agreed to hold off enforcement until the court ruled on Kalshi's injunction request (petition p.8, ¶¶30, 32). That ruling came on July 7, 2026. We found no Commission enforcement step since, and we could not determine whether the letter remains in effect.

The City Council. On August 12, 2026 the New York City Council opened an inquiry into how Kalshi, Polymarket, Coinbase and Gemini market themselves. It is an inquiry and orders nothing.

The legislature. Senate bill S9414, the ORACLE Act, was reported and sent to the Finance Committee on May 20, 2026. S8889 would require a Department of Financial Services license to operate a prediction market and has been in committee since January 13. Neither has passed.

Private suits. We found more than a dozen suits naming Kalshi in the Southern District of New York, led by In re Kalshi Sports Prediction Market Litigation, No. 1:25-cv-08585. We read docket listings only, not the complaints, so we don't describe their claims or status.

New York sued Polymarket US in a separate case on September 24, 2026: is Polymarket legal in New York?.

We found no New York order or letter aimed at brokers that offer Kalshi's contracts. The attorney general sued Coinbase Financial Markets and Gemini Titan on April 21, 2026, in two separate petitions in New York County Supreme Court. Neither petition, including the Coinbase petition, mentions Kalshi, which we confirmed by searching their full text. We found no New York action against Robinhood or Webull, and nothing like the broker agreements Michigan's regulator announced (Michigan).

Nothing in the case addresses federal tax, and a state gambling case isn't a ruling on federal income tax. Gains and losses on past trades are reported on a federal return; how Realize rebuilds them from Kalshi's data is in how to file Kalshi taxes. Every other state's status is on the Kalshi legal page.