U.S. Federal Judge Says CFTC Order Protecting Kalshi “Suggests Collusion”

U.S. District Judge Colleen McMahon on November 10 denied prediction market Novig’s request for a preliminary injunction against New York, finding its sports event contracts likely do not qualify as swaps under the Commodity Exchange Act and that the state could apply its gambling laws. According to Odaily, McMahon criticized a Commodity Futures Trading Commission (CFTC) order requiring Kalshi to continue operating after New York sued, saying it had the appearance of collusion between the regulator and the regulated party. She said CFTC rules were internally contradictory because they classify sports and other event contracts as swaps while excluding sports betting and casino wagering from that category. Novig filed a notice of appeal with the U.S. Court of Appeals for the Second Circuit several hours after the ruling.