CFTC sues New York: the case, Albany's bills and what it means for traders

Key dates: CFTC v. New York, the state's cases and Albany's bills

Date	What happened	Where
October 24, 2025	The New York State Gaming Commission sends Kalshi a cease-and-desist letter over sports contracts. Kalshi responds by suing the commission's members (KalshiEX v. Williams).	Gaming Commission; federal court, Manhattan
January 13, 2026	S8889, Sen. Jeremy Cooney's licensing bill, is referred to the Senate Banks Committee.	Albany
March 10, 2026	S9414, Sen. Joseph Addabbo's ORACLE Act, is introduced.	Albany
April 6, 2026	The Third Circuit rules 2-1 for Kalshi against New Jersey at the preliminary injunction stage (KalshiEX v. Flaherty).	Federal appeals court, Philadelphia
April 21, 2026	Attorney General Letitia James sues Coinbase Financial Markets and Gemini Titan over their prediction market products.	New York
April 22, 2026	Gov. Kathy Hochul signs Executive Order 60, barring state employees from using confidential information to profit on prediction markets.	Albany
April 24, 2026	The CFTC sues New York. The same day, James joins 37 other attorneys general in a brief backing Massachusetts against Kalshi.	Federal court, Manhattan
May 20, 2026	The Senate gaming committee reports S9414 to the Finance Committee: 6 in favor, none against, 1 in favor with reservations.	Albany
June 4, 2026	Last scheduled day of the 2026 legislative session. No prediction market bill has passed.	Albany
July 7, 2026	Judge Analisa Torres denies Kalshi's request to block New York from enforcing its gambling laws. Kalshi appeals to the Second Circuit the next day.	Federal court, Manhattan
July 27, 2026	Judge Torres denies Kalshi's request for an injunction while the appeal is pending.	Federal court, Manhattan
July 31, 2026	New York sues Kalshi in state court; the case is moved to federal court the same day. Separately, the court denies the federal government's request for a temporary restraining order in CFTC v. New York.	State and federal court, Manhattan
August 4, 2026	Novig's exchange, Ludlow Exchange LLC, files suit against the Attorney General and Gaming Commission members (reported on August 5).	Federal court, Manhattan
August 11, 2026	The CFTC uses its emergency authority to order Kalshi to keep operating as an exchange.	CFTC
August 17, 2026	A9251, the Assembly's ORACLE Act, is amended to version B and sent back to committee.	Albany
September 3, 2026	The Second Circuit orders Kalshi's New York appeal heard together with two Connecticut appeals. The CFTC files a brief as a friend of the court on September 8.	Federal appeals court, Manhattan
September 24, 2026	New York sues QCX LLC, which does business as Polymarket US. The case is moved to federal court, and Polymarket US files its own suit against state officials.	State and federal court, Manhattan
October 6 to 12, 2026	New York asks to return the Polymarket US case to state court (October 6). Polymarket US asks for a preliminary injunction and oral argument (October 12).	Federal court, Manhattan
October 30, 2026	New York's brief is due in Kalshi's Second Circuit appeal.	Federal appeals court, Manhattan
January 6, 2027	The Legislature convenes for its next session.	Albany

Dates come from the CFTC, the Attorney General's office, the Governor's office, the New York State Senate bill pages and the public federal dockets on CourtListener. Each one is linked in the sections below and listed under Sources. Public dockets can lag behind the court's own system, so "no ruling on the public docket" means only that none was posted where we could read it.

Why did the CFTC sue New York?

The Commodity Futures Trading Commission regulates futures and swaps exchanges. Its position is that event contracts traded on an exchange it has registered are federal derivatives, and that federal law gives it exclusive authority over them. New York's position is that contracts on sports and other events are gambling under state law, and that a company offering them to New Yorkers needs a license from the State Gaming Commission.

The dispute became a lawsuit in three steps. The Gaming Commission sent Kalshi a cease-and-desist letter in October 2025. On April 21, 2026, the Attorney General sued Coinbase Financial Markets and Gemini Titan, seeking forfeiture of profits, restitution and fines of three times those profits. Three days later, on April 24, the CFTC filed its own suit in the Southern District of New York. It asks for a declaration that federal law gives it exclusive authority over event contracts and for a permanent injunction stopping New York from enforcing state laws it says are preempted. CFTC Chairman Michael S. Selig said the agency would not allow state governments "to undermine the agency's longstanding authority over these markets."

New York is not alone on its side. On April 24, James joined 37 other attorneys general in a brief to Massachusetts's highest court arguing that sports event contracts should be subject to state gambling laws. The CFTC is not alone on its side either: its August release lists suits against nine states, New York among them.

Has a court ruled in CFTC v. New York?

Not on the main question. The case is captioned United States of America v. State of New York on the public docket and is assigned to Judge Lorna G. Schofield. Two requests have been in play:

• A temporary restraining order. The court denied it on July 31, 2026, according to a letter New York filed in the case on August 31.
• A preliminary injunction. This is the request that would pause state enforcement while the case runs. It has been briefed by both sides and by outside groups. Coinbase and Gemini filed in support and the American Gaming Association filed in opposition in early September. The court held a conference on August 31. As of the last docket entries we could read, dated October 9, there is no decision.

Both sides keep sending the judge new decisions from other courts. That is a sign of how unsettled the law is: federal courts in different parts of the country have reached different conclusions about whether federal commodities law overrides state gambling law for these contracts.

Which companies has New York taken action against?

Company	What New York did	Current posture
Kalshi	Gaming Commission cease-and-desist letter (October 24, 2025). Attorney General's lawsuit (July 31, 2026).	Kalshi lost its own request for an injunction on July 7 and has appealed. The state's lawsuit is in federal court before Judge Vernon S. Broderick, where New York's request to return it to state court is pending.
Polymarket US (QCX LLC)	Attorney General's lawsuit (September 24, 2026).	Both the state's case and Polymarket US's own suit are before Judge Ronnie Abrams. A remand request and a preliminary injunction request are pending.
Coinbase Financial Markets and Gemini Titan	Attorney General's lawsuits (April 21, 2026).	Treated as related to CFTC v. New York and assigned to the same judge.
Novig (Ludlow Exchange LLC)	No state lawsuit had been filed when Novig sued first, in early August 2026.	Novig's request for a preliminary injunction is before Judge Colleen McMahon, who said she intends to decide it on the written filings.

The lawsuit against Kalshi and the lawsuit against Polymarket US make the same core claims: that the contracts meet New York's definition of gambling, that neither company holds a Gaming Commission license, that neither pays the taxes licensed operators pay, and that both accept users aged 18 to 20 when New York sets 21 as the age for mobile sports platforms. Each suit asks a court to stop the company operating without a license and to order forfeiture, restitution and fines of three times the gains. The CFTC has described the Kalshi suit as seeking more than $36 billion. Both companies argue that federal law overrides the state's claims.

Kalshi's earlier case went the state's way. On July 7, 2026, Judge Analisa Torres denied Kalshi's request for a preliminary injunction against the Gaming Commission, and on July 27 she denied an injunction pending appeal. The Attorney General and the Governor called it a court victory the day after the first ruling. That ruling was about a preliminary injunction; it is the one now on appeal.

The state's suit against Kalshi is on the federal docket as case 1:26-cv-06550. The Polymarket US cases are 1:26-cv-08338 (the state's suit) and 1:26-cv-08345 (Polymarket US's suit). Novig's suit, reported one day after it launched contracts in 47 states, is 1:26-cv-06676; the plan to decide it without oral argument was reported by The PM Pulse. A separate case, North American Derivatives Exchange, Inc. v. James, was filed on June 12, 2026 and is also listed as related to CFTC v. New York.

What did the CFTC's emergency order for Kalshi do?

After New York asked a state court for a temporary restraining order against Kalshi, Kalshi told the CFTC it faced a market emergency. On August 11, 2026, the CFTC said it had used its emergency authority and ordered the exchange to keep operating in line with the Commodity Exchange Act's core principles. Selig said New York "has no business regulating these interstate financial markets," as The Block reported.

New York's response, in its August 31 letter to Judge Schofield, was that the order "should be given no weight." The state argued that courts, not the agency, decide what the federal statute means. No court in New York has ruled on the order's effect that we could find. It is an agency order in a live dispute, not a court decision on whether the state's laws apply.

What is the Second Circuit deciding?

The Second Circuit is the federal appeals court for New York, Connecticut and Vermont. Its decisions bind the federal trial courts in Manhattan, so its ruling in KalshiEX v. Williams is likely to shape every New York case on this page. Kalshi filed its opening brief on August 31, 2026. The court ordered the appeal heard in tandem with two Connecticut appeals on September 3. The CFTC filed a supporting brief on September 8. New York's brief is due on October 30.

Other appeals courts have split. The Third Circuit, which covers New Jersey, Pennsylvania and Delaware, ruled 2-1 on April 6, 2026 that Kalshi was likely to succeed in arguing that federal law preempts New Jersey's gambling laws for sports event contracts on a registered exchange. That was a preliminary injunction ruling, not a final one, and it does not bind courts in New York. New York's August 31 letter cites a Ninth Circuit decision of August 28, 2026 and several trial court rulings that went the other way. A disagreement between appeals courts is the usual route to the Supreme Court, but we have not confirmed that it has taken a case.

What would Albany's prediction market bills do?

Three bills from the 2025-2026 session take two different approaches. None has passed either chamber.

Bill	Sponsor	Approach	Last action
S9414 (ORACLE Act)	Sen. Joseph P. Addabbo Jr.	Sets rules for prediction market platforms: a minimum age of 21, advertising limits and protections for at-risk users. Bars markets on athletic events, politics, deaths, catastrophic events and security incidents. Enforcement by the Attorney General and the Gaming Commission.	May 20, 2026: reported by the Senate gaming committee and committed to Finance.
A9251B (ORACLE Act)	Assemblymember Clyde Vanel	The Assembly's bill setting requirements and restrictions on prediction markets, through a new article of the General Business Law.	August 17, 2026: amended and recommitted to Consumer Affairs and Protection.
S8889 (New York prediction market regulation act)	Sen. Jeremy Cooney	Requires a license from the Department of Financial Services to operate a prediction market, with conduct standards and enforcement by that department.	January 13, 2026: referred to Banks.

The details are on the Senate's pages for S9414, A9251 and S8889. The difference between the approaches is who would be in charge. The ORACLE Act treats prediction markets as something close to gaming and removes whole categories of contracts. The licensing bill treats them as financial products supervised by the state's financial regulator. Assemblymember John McDonald has a similar licensing bill in the Assembly's gaming committee, Spectrum News reported on September 28, 2026.

The 2026 session calendar ran from January 7 to June 4. Under the state constitution, the Legislature assembles on the first Wednesday after the first Monday in January, which is January 6, 2027. Addabbo has said he wants prediction markets to be part of state budget discussions when lawmakers return.

A state license would not end the federal case. Whether a state can require one at all for contracts on a federally registered exchange is the question the courts are deciding.

Why are regulators worried about insider trading and suspicious trades?

A suspicious trade is a position that a platform's surveillance flags for review because of its size or its timing. The classic pattern is an account that buys heavily just before news that only a few people could have known. Exchanges registered with the CFTC are required to monitor trading and can refer cases to the agency.

Three dated facts from 2026 show why this became part of the New York argument:

• Flagged trades rose sharply. Reuters reported in May 2026 that Kalshi had flagged more than 400 suspicious trades since the start of the year, more than double the number it investigated in all of 2025, and that some had been referred to the CFTC, according to Benzinga's account of the report.
• The first federal case. On April 23, 2026, the CFTC filed a complaint in the Southern District of New York against a U.S. service member it accuses of trading event contracts using classified information. The agency called it the first time it had charged insider trading involving event contracts.
• New York's own rule. On April 22, 2026, Gov. Hochul signed Executive Order 60, which forbids covered state officers and employees from using confidential information from their jobs to profit on prediction markets, or to help others do so. It took effect immediately.

More flags do not by themselves mean more wrongdoing; better surveillance also produces more flags. For a trader, the practical effects are that a contract under review can take longer to settle and that a large position in a thinly traded contract is more likely to draw questions. For Albany, the argument is about who should do the supervising, which is the same question the lawsuits ask.

How does Albany politics show up in prediction markets?

Contracts about state politics tend to fall into a few families: whether a bill passes by a date, whether the state budget is adopted on time, who wins a statewide race, or whether an official still holds a post on a stated date. Listings change often, and S9414 would bar political markets for New Yorkers if it became law, so check the app for current listings.

Example: this is a made-up contract, not a real listing. Suppose the question is "Will New York adopt its state budget by April 1?" and a contract on that outcome last traded at $0.30. A buyer at $0.30 would receive $1 if the budget is adopted in time and lose the $0.30 if it is not. The price is an estimate that moves as people trade, not a forecast you can rely on.

Our guide to how Kalshi works explains settlement rules, and our Mamdani page covers city politics.

What does the dispute mean for someone trading from New York?

Our New York status for the platforms we cover is: Available — dispute pending (as of October 13, 2026). We keep that status and the reasoning behind it in our New York status guide. This page describes what courts, regulators and lawmakers have said and done. It is not advice about your own situation.

The platforms we cover are Kalshi, Polymarket US, OG and ProphetX. Kalshi's, Polymarket US's and OG's minimum age is 18; ProphetX's is 18 (or the local age of majority if higher); we recommend 21+.

Things worth knowing while the cases run:

• A ruling can change what is offered. The state's lawsuits ask courts to stop named companies operating without a state license, and S9414 would remove whole categories of contracts. Check each platform's own notices before you trade.
• Not every platform is in the same position. The lawsuits name specific companies and mostly focus on particular contract types. Our Kalshi vs. Polymarket US comparison and our page on New York prediction market gaps explain the differences.
• Records matter. Trading involves risk of loss, and proceeds can have tax consequences whatever the courts decide. See our tax overview for New Yorkers.

What we are watching next: a decision on the preliminary injunction in CFTC v. New York, the remand rulings in the Kalshi and Polymarket US cases, a decision in Novig's case, New York's Second Circuit brief on October 30, and whether the bills are introduced again when the Legislature convenes in January.

Frequently asked questions

What is CFTC v. New York?

It is a federal lawsuit the Commodity Futures Trading Commission filed on April 24, 2026 in the Southern District of New York. The agency asks the court to declare that it has exclusive authority over event contracts on registered exchanges and to stop New York from enforcing state gambling laws against them. New York disputes that.

Has the court ruled in CFTC v. New York?

Not on the main question. The court denied a temporary restraining order on July 31, 2026. The request for a preliminary injunction was still undecided when we last checked the public docket on October 13, 2026, and no hearing date was posted.

Which prediction market companies has New York sued?

The Attorney General sued Coinbase Financial Markets and Gemini Titan on April 21, 2026, Kalshi on July 31, 2026 and QCX LLC, which does business as Polymarket US, on September 24, 2026. Novig sued New York officials first, in early August 2026. All of these cases are pending.

Has New York passed a prediction market law?

No bill has passed either chamber. S9414 is in the Senate Finance Committee, S8889 is in the Senate Banks Committee and A9251B is in an Assembly committee. The 2026 session calendar ended on June 4, and the Legislature next convenes on January 6, 2027.

What did the CFTC's emergency order for Kalshi say?

On August 11, 2026, the CFTC said it had used its emergency authority to order Kalshi to keep operating as an exchange under the Commodity Exchange Act's core principles. New York told the federal court the order should be given no weight. No New York court ruling on its effect was posted when we last checked.

Does the Third Circuit's Kalshi ruling apply in New York?

It does not bind New York courts. The Third Circuit covers New Jersey, Pennsylvania and Delaware, and its April 6, 2026 decision was at the preliminary injunction stage. New York is in the Second Circuit, where Kalshi's appeal is pending and the state's brief is due October 30, 2026.

Can New Yorkers still use prediction market apps while the cases run?

Our New York status is: Available — dispute pending (as of October 13, 2026). The courts have not issued a final ruling, and a decision could change what platforms offer. See our New York status guide and check each platform's own notices.