Kalshi loses New York court battle as Google bans prediction market extensions

Kalshi has lost another round in court. A federal judge has turned down the company’s request to stop New York from applying its gambling laws to the prediction markets platform.

U.S. District Judge Analisa Torres in Manhattan issued the ruling on Tuesday. She said Kalshi was not entitled to a preliminary injunction. She reasoned that the federal Commodity Exchange Act does not override New York’s gambling laws when it comes to Kalshi’s sports-event contracts.

Torres said New York has strong reasons for its position. She pointed to the state’s goals of stopping gambling addiction, protecting the integrity of sports, and keeping unregulated contracts from spreading. Those interests, she wrote, “heavily” outweigh Kalshi’s arguments about federal law taking priority, and about customers running into what the company called “intractable” tech problems.

“Kalshi has not, therefore, made a clear or substantial showing that it is likely to succeed on the merits,” Torres wrote. She also noted that federal courts around the country remain split on this question.

As Cryptopolitan also reported, Kalshi has won in some circuits and lost in others, with the split now pushing the case closer to the Supreme Court.

New York Governor Kathy Hochul and Attorney General Letitia James put out a joint statement on Wednesday, welcoming the decision. “New York’s gambling laws are designed to protect consumers,” they said. “We will continue to hold all gambling platforms accountable to the law – and that includes prediction markets.”

Commodity Futures Trading Commission sees things differently

CFTC Chairman Michael Selig has said his agency holds “exclusive” authority over commodity derivatives markets, a category he says includes prediction markets.

Platforms like Kalshi and Polymarket let users bet on outcomes, from sports results to elections. Interest in them grew sharply after the 2024 presidential election, when their live odds turned out to be more accurate than traditional polls in predicting Donald Trump’s win over Kamala Harris.

Kalshi first sued New York in October, after the state’s gaming commission told the company to stop offering sports event contracts without a license.

On April 21, New York filed separate lawsuits against Coinbase Financial Markets and Gemini Titan, accusing both companies of promoting gambling through their own event contracts.

Three days later, the CFTC sued New York. Last month, the CFTC said it has also challenged similar regulatory moves in eight other states: Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, Rhode Island, and Wisconsin.

Google bans prediction market extensions

In a second blow, Google has updated its Chrome Web Store rules to ban browser extensions tied to prediction markets.

The company’s Developer Program policy now lists predictive markets as a prohibited product. “Extensions that facilitate or enable real money transactions on predictive outcomes are not allowed,” Google said in a blog post announcing the change. Enforcement begins August 1, 2026.

Spotify has also recently spoken up about removal of its branding since no partnership exists between them.

That request came after Spotify found and removed more than 500,000 fake streams that had helped push Malcolm Todd’s song “Earrings” onto its charts. Kalshi had already settled a prediction market tied to those fake streams.

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