CFTC Declares Market Emergency to Keep Kalshi Running Amid New York Lawsuit
CFTC declares market emergency, orders Kalshi to continue to operate in New York
The Commodity Futures Trading Commission invoked its emergency authority after KalshiEX notified it of a market emergency caused by New York Attorney General Letitia James's lawsuit seeking to halt all event contracts and $36 billion in damages. The CFTC ordered Kalshi to continue operating, arguing that state gaming laws cannot regulate interstate derivatives markets. The agency has sued several states to protect its jurisdiction.
New York intends to make event contract derivatives waste away under its iron curtain of state gaming laws before the courts get the chance to issue final rulings.
- akerl_
EDIT: see DannyBee's comment below ( https://news.ycombinator.com/item?id=49266746 ). It does look like the CFTC has extrapolated the "nationwide" out of either some novel interpretation of the filing or just entirely fabricated it as their justification for their action.
I've got no love for Kalshi, but "orders Kalshi to continue operate in New York" doesn't seem to be present anywhere in the actual release.
The article presents the sequence of events as:
1. The State of NY files a lawsuit against Kalshi under the theory that it can be regulated by state gambling laws.
2. The State of NY files for a temporary restraining order requiring Kalshi to halt trading nationally, not just in NY.
3. Kalshi reaches out to the CFTC to claim that NY doesn't have the authority to regulate interstate commerce.
4. The CFTC agrees and uses their authority to override the TRO.
That seems pretty aligned with how interstate commerce is regulated and managed in the US.
- decimalenough
Am I reading this right? The state of New York wants Kalshi to stop offering prediction gambling, excuse me, "event contracts" in New York, and the federal Commodity Futures Trading Commission just ordered Kalshi to keep operating in New York regardless?
- pamcake
So the CFTC frames Kalshi as a financial derivatives exchange for the financial instrument category of event contracts, dismissing NYs characterization of it as a gambling/betting platform. Interesting.
- mavbo
Friends in high places are worth their weight in gold. Anyone want to bet on how much they weigh?
- impish9208
Americans’ continued ability to gamble, err…, trade multi-leg parlays is a matter of national security!
- 1vuio0pswjnm7
Here is something to bet on
https://www.ncsl.org/financial-services/prediction-markets-2...
Would Kalshi allow people to bet on whether Kalshi will be banned in a particular state
- stock_toaster
With “Chevron Deference” struck down, I assume this means the courts will get to decide if it is in fact gambling or not?
- xp84
It was never more virtuous to be options-trading GME shares on Robinhood than gambling at the dog track or betting on basketball games. The only reason some regulators are going after Kalshi or Polymarket is that the casino owners are lining these particular politicians' pockets more than the futures trading companies are.
I actually am not opinionated on it other than all kinds of gambling are basically the same -- and that includes a lot of the ways stock market is used in practice.
I do admit gambling addiction is a real thing and that this new super convenient and easy and legal option incrementally brings more people into that world of pain. But I also think it's stupid to ban gambling like they did with alcohol in the last century. It'll just put more control in the hands of the mob.
The mob. There's an organization that I bet is also eagerly lining the pockets of these "kill Kalshi" regulators.