The US Commodity Futures Trading Commission (CFTC) invoked its emergency authority on Tuesday, ordering prediction market Kalshi to continue operating amid a legal battle with New York. New York is suing Kalshi, accusing it of running an illegal, unlicensed gambling business by offering contracts tied to sports, culture, elections and other events, seeking at least $36 billion in compensatory damages. The CFTC argues that the Commodity Exchange Act grants it exclusive jurisdiction over these contracts and that New York’s enforcement action itself constitutes a market emergency threatening orderly trading and price discovery. This confrontation is part of a broader national fight over whether federal law preempts state gambling laws as applied to event contracts traded on federally regulated exchanges.
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