Manhattan Federal District Judge Analisa Torres on July 8 rejected Kalshi's request for a preliminary injunction to prevent New York State from applying gambling laws to its prediction market platform. Kalshi subsequently filed an appeal with the Manhattan Federal Court of Appeals. On the same day, Google updated its Chrome app store policies, banning browser extensions related to prediction markets, with the policy taking effect on August 1.
Torres' Ruling on Kalshi's Loss: Three Legitimate Goals of New York Gambling Law
According to Judge Torres's written decision, she found New York's position well-founded, citing three legitimate interests: curbing gambling addiction, maintaining the fairness of sports competitions, and preventing unregulated contracts from spreading. Torres ruled that these state interests "far outweigh" Kalshi's arguments regarding federal law precedence and the technical difficulties clients might face; regarding sports event contracts, the federal Commodity Exchange Act does not supersede New York gambling law.
Torres also noted that federal courts nationwide remain divided on this issue, and the case's potential to reach the Supreme Court is increasing.
Timeline of Federal and State Jurisdiction Conflicts: CFTC Challenges and Coinbase/Gemini Litigation Background
According to reports, the legal conflicts in the Kalshi case are as follows:
-
October 2025: Kalshi first sues New York State (due to the New York State Gaming Commission's demand that it cease offering unlicensed sports event contracts).
-
April 21, 2026: New York State sues Coinbase Financial Markets and Gemini Titan, accusing them of promoting gambling activities.
-
April 24, 2026: CFTC sues New York State.
-
Recently: CFTC has challenged similar regulatory measures in Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, Rhode Island, and Wisconsin, totaling nine states including New York.
CFTC Chairman Michael Selig stated that his agency has "exclusive" jurisdiction over derivatives markets, including prediction markets; this directly conflicts with the stance of state regulators.
Google Chrome Ban Effective August 1: Developer Program Policy Update and Scope
According to Google's blog announcement, the Chrome Web Store policy update will take effect on August 1, 2026, officially listing prediction markets as a prohibited product category in its Developer Program Policies. Google stated, "Extensions that facilitate or support real-money trading based on prediction outcomes are not permitted."
This policy update affects all existing and new prediction market-related browser extensions; specific scope and the de-listing schedule for existing extensions will follow Google's official developer policy documents.
Frequently Asked Questions
What legal actions did Kalshi take after losing in New York?
Reports indicate that after Judge Torres rejected its preliminary injunction request, Kalshi filed an appeal with the Manhattan Federal Court of Appeals (Second Circuit). Kalshi's lawyers declined to comment on the original ruling. Judge Torres noted that federal courts nationwide remain divided on this issue, suggesting the case may ultimately be appealed to the Supreme Court.
What are the specific regulations banning prediction market Chrome extensions?
According to Google's announcement, the updated Developer Program Policies list prediction markets as a prohibited product category. "Extensions that facilitate or support real-money trading based on prediction outcomes are not permitted," with the policy taking effect on August 1, 2026. Specific enforcement details will follow Google's official policy documents.
What is the core dispute between CFTC and New York State regarding prediction market jurisdiction?
Reports state that CFTC Chairman Selig claims his agency has "exclusive" jurisdiction over derivatives markets, including prediction markets. New York State believes its gambling laws have legitimate jurisdiction, aiming to curb gambling addiction, maintain sports fairness, and prevent unregulated contracts from spreading. Judge Torres ruled that the federal Commodity Exchange Act does not supersede New York gambling law for sports event contracts. CFTC has challenged similar measures in eight other states, totaling nine states including New York.
