5 ms·
EDIT: see DannyBee's comment below ( https://news.ycombinator.com/item?id=49266746 https://news.ycombinator.com/item?id=49266746 ). It does look like the CFTC h
by akerl_ 2mo ago
EDIT: see DannyBee's comment below ( https://news.ycombinator.com/item?id=49266746 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.
- Avicebron 2mo agoI think the question is whether or not this is damaging to the case that the Kalshi and others could be regulated state by state..
- akerl_ 2mo agoI (unfortunately) think that the NY AG screwed up our opportunity to press that question by aiming nationally. The CFTC got to skip that and just shut down the national TRO. I'd love to see another state push for a state-specific restriction and see how that plays out.
- deleted 2mo ago[deleted]
- DannyBee 2mo agoExcept they haven't, because they did not request national relief. They requested state-specific relief.
- hn_throwaway_99 2mo agoI see lots of back and forth over this very important point, which has to be either true or false. Can you point to sources?
- DannyBee 2mo agohttps://ag.ny.gov/sites/default/files/court-filings/new-york-v-kalshiex-llc-petition-2026.pdf https://ag.ny.gov/sites/default/files/court-filings/new-york... See page 29
- mminer237 2mo agoI think the issue is that Kalshi is based in New York, so banning them from operation in New York is effectively shutting them down.
- TheCoelacanth 2mo agoI don't see the relevance. If they don't want to follow New York law, they should move somewhere else.
- mminer237 2mo agoI don't disagree. People just seemed confused how New York was trying to shut them down nationwide.
- refulgentis 2mo agoThere were 3 alarmingly assertive, not even wrong in the Pauli sense, comments I saw in this thread, this being the last, and it turns out they’re all by you. HN in general gets ahead of its skis a ton on legal stuff, it’s not personal. I deserve what I’ll get for speaking plainly to you, I hope the fact I’m speaking plainly and incurring cost will encourage you to move slightly more slowly. In order: Regulating interstate commerce is a fed thing, yes, that doesn’t mean states are unable to do anything at all to companies operating in multiple states. It was jarring to hear that described as one of the most settled principles we have. NYS was not asking for a national TRO. It was jarring to read that asserted. The first paragraph of the CFTC release we are commenting on says it ordered Kalshi to be able operate nationally. It was jarring to read it was made up that the CFTC ordered it to be able to operate.
- aliasxneo 2mo agoIt seems that New York is asking the court for a temporary restraining order that would prohibit Kalshi from offering all event contracts nationwide. I also have zero love for Kalshi, but I can see why such a request would be concerning, regardless of whether I think Kalshi is a degenerate trash heap.
- akerl_ 2mo agoYea; interstate commerce being the domain of the federal government is one of the more tested legal concepts we have here.
- akersten 2mo agohasn't stopped states from trying to impose their internet rules on visitors everywhere :/
- PaulDavisThe1st 2mo agoJust around, or slightly around the level of testing that Roe vs Wade prior to Dobbs. Or a bakers dozen of other established precedents that were "one of the more tested legal concepts" until ... recently.
- pbh101 2mo agoGenerally speaking, no: there’s a significant difference in precedent between the two. IANAL, but interstate commerce is explicitly written into the Constitution as the jurisdiction of the federal government and was tested (and generally serially expanded) in court multiple times long before Roe.
- PaulDavisThe1st 2mo agoBirthright citizenship is explicitly written into the Constitution, yet about a month ago, 2 SCOTUS justices provided opinions and votes suggesting that this detail doesn't matter much.
- tracerbulletx 2mo agoThat is not true? The order was to stop them from operating in the state.
- akerl_ 2mo agoDo you have a source for that? From the release: > In the lawsuit, filed on July 31, New York seeks a temporary restraining order prohibiting KalshiEX, LLC from offering all event contracts nationwide and more than $36 billion in damages.
- DannyBee 2mo agoLawyer here: https://ag.ny.gov/sites/default/files/court-filings/new-york-v-kalshiex-llc-petition-2026.pdf https://ag.ny.gov/sites/default/files/court-filings/new-york... This is the complaint. If you go to page 29 you'll see what they requested. The claim they are trying to prevent them from offering all event contracts nationwide is simply false. The closest anywhere is a claim to enjoin them from violating some federal criminal statutes that they would not be violating if they were not operating in new york illegally (IE do not stop them from operating nationwide). You can also see their is no specific number on the damages. In fact, the only specific number is the request for Kalshi to pay $2000 in costs to the state of NY. The CFTC is, understandably, relying on people not bothering to read it and so has put out an "alternate set of facts".
- akerl_ 2mo agoEdited my earlier comment to point here. Is your assessment that CFTC is pulling the broader impact fully out of the air, or are likely to try to spin the coverage of events in New York for participants outside of New York as counting as interstate commerce?
- DannyBee 2mo agoOh worse than that. The "emergency powers" they speak of are 7 U.S.C. § 12a(9), and they are quite specific. It gives them the authority to direct a registered entity to do a few specific things. None of those things are relevant to here. It's stuff like emergency margin requirements, position limits, etc. Not "violate state law". It gives them no power to enable a registered entity to violate a TRO, or anything like that. Such a power would have to come through pre-emption. The CEA gives them zero authority to preempt state law directly, and any pre-emption would have to be argued to already have occurred under the Commodity Exchange Act. They'll argue it occurs because of their order, but it actually doesn't meet the requirements to do that, so then they'll argue the CEA preempts state law. As you may imagine, this has been argued about before, for a very very very long time. Gambling is core state police power, and has been found so many times. As such, presumptions against pre-emption would apply, etc. Even in the current court that ignores precedent, using an esoteric made-for-specific-situations emergency power statute like this one would to preempt new york/etc (this is not the only case) law would run clearly afoul of the so-called major questions doctrine. Lastly, the current CEA regulations actually ban event contracts that are unlawful under state law (17 CFR 40.11): https://www.law.cornell.edu/cfr/text/17/40.11 https://www.law.cornell.edu/cfr/text/17/40.11 Prohibition. A registered entity shall not list for trading or accept for clearing on or through the registered entity any of the following: ... 1. (1) An agreement, contract, transaction, or swap ... that involves, relates to, or references terrorism, assassination, war, gaming, or an activity that is unlawful under any State or Federal law; So trying to pre-empt state law when the existing regulations clearly don't allow event contracts that are disallowed under state law is ... not likely to succeed. Also note that New York has claimed a violation of the wire act in there, and in particular 18 U.S.C. § 1084(a). This is a federal statute that makes it illegal to transmit sports betting information over the wire (it's okay if it's from a jurisdiction where it's legal to a jurisdiction where it's legal). They have asked the court to enjoin them from violating this. This claim is here because it avoids all the pre-emption issues - it's a federal statute. So New York is also hedging their bets on the state preemption issue. All that said, there is also a CFTC-designated contract market that Kalshi operates, and that they could likely exercise significantly more power over, and New York can order them around less on. But that is likely to end up in the supreme court, and harder to predict. Any other court the answer would be clear - congress doesn't have the authority to regulate purely intra-state gambling, etc.
- deleted 2mo ago[deleted]
- semiquaver 2mo agoWhat? It’s in the first paragraph. > August 11, 2026 > > WASHINGTON — The Commodity Futures Trading Commission today exercised its emergency authority in response to KalshiEX, LLC’s notification of a market emergency and ordered the exchange to continue to operate in accordance with the Commodity Exchange Act’s Core Principles. Further, the operative document that this press release is about is titled “ORDER DIRECTING KALSHI TO CONTINUE EXERCISING DCM FUNCTIONS”: https://www.cftc.gov/media/14471/OGC_MarketEmergencyDeclarationOrder081126/download https://www.cftc.gov/media/14471/OGC_MarketEmergencyDeclarat...
- akerl_ 2mo agoThe "order" there is effectively a reset button to the TRO. Its function is to say "you can ignore the TRO and continue business as usual". It doesn't force Kalshi to continue operating if they had their own reasons for pausing operations.
- semiquaver 2mo agoYou are simply wrong. The order invokes statutory emergency authority to require markets to operate as before. It’s materially different from cancelling the TRO (which has not been granted)
- dannyw 2mo agoThe order actually does legally require Kalshi to continue operating, and unless they successfully appeal, Kalshi would be breaking federal law. Market regulators do have this power.
- DannyBee 2mo ago2 is false, actually. If you read the complaint, the prayer for relief is quite clear that they only are trying to stop them from operating in new york, deliberately offering gambling to new yorkers, etc. There is no relief requested nationwide.
- kcb 2mo agoIsn't the act of not offering something in NY = to not offering it nationwide?
- anigbrowl 2mo agoI think it's good to have the official context from the state of NY as well, which argues that Kalshi meets the state's standards for gambling; has serially refused to get the required licenses, and serves customers aged 18-20 in a market where gambling is restricted by law to people over 21. https://ag.ny.gov/press-release/2026/governor-hochul-and-attorney-general-james-announce-new-york-has-sued-kalshi https://ag.ny.gov/press-release/2026/governor-hochul-and-att... My impression was that NY wanted a TRO to stop Kalshi operating in New York, not nationally. A TRO seems like a rather extreme measure in that it assumes the plaintiffs win the lawsuit as a premise, but I guess that's partly a function of how long New York has been trying and failing to obtain compliance with its gaming laws, and intended to provoke a preliminary hearing into the merits of the case (vs letting the litigation drag on for years without anyhting changing).
- kevin_thibedeau 2mo agoNY let DraftKings plaster Penn station and subway fare gates with ads before sports betting was legal there. They never sought an injunction to shut down those operations outside NY.
- iAMkenough 2mo agoSomething doesn’t have to be legal in one jurisdiction to advertise it another, thanks to the First Amendment. There’s plenty of recreational marijuana billboards along interstate highways in states where it’s illegal. DraftKings would have sued NY if they didn’t “let” them advertise.
- beckford 2mo agoThe most important lines to me are the CFTC Chairman's quote: > These are financial exchanges that offer financial instruments and operate across state lines. They match the bid from a resident of one state with the offer of a resident from another state and submit the trade to a clearinghouse that backstops the transactions of customers throughout the country. New York has no business regulating these interstate financial markets. If true, it seems quite irrelevant that NY is limiting its suit to NY customers. NY would be restricting trade to people in other states. (I am not a fan or user of Kalshi)
- galleywest200 2mo agoIsn't this how gambling works though? You and I place a similar value of chips on a table, then the winner walks it over to a third party (the counter at the casino) to exchange the chips for currency?
- SpicyLemonZest 2mo agoIt's a relatively uncommon structure for gambling, and things that do work that way (like casual sports bets between friends) are often exempt from local gambling laws. Traditional sports betting was done directly between a gambler and their sportsbook of choice at whatever profit-maximizing odds the bookie chose.
- rgmerk 2mo agoIn other parts of the world, betting exchanges like BetFair operate this way, but unlike Kalshi, there's no pretence that what's occurring is anything other than gambling, and they are heavily regulated like other sports betting operators.
- SpicyLemonZest 2mo agoWhich I think is obviously where the US is going to settle in the long term. Just a question of how many people lose their shirts before we get there.
- bhouston 2mo agoYour claim here is wrong: > 2. The State of NY files for a temporary restraining order requiring Kalshi to halt trading nationally, not just in NY. The State of New York did *NOT* file a temporary restraining order, neither in NY or nationally. Please find a citation of that if you want to claim it is true. Rather the State of New York filed suit here to stop operations in New York: https://ag.ny.gov/press-release/2026/governor-hochul-and-attorney-general-james-announce-new-york-has-sued-kalshi https://ag.ny.gov/press-release/2026/governor-hochul-and-att... Specifically the lawsuit asks for: "Permanently enjoining Respondent and its principals, agents, and employees from operating an unlawful gambling business, or otherwise advancing gambling activity, or profiting from gambling activity, within or from New York or to persons in New York, without being licensed by the New York State Gaming Commission"
- tsimionescu 2mo agoThat claim is coming directly from the CFTC, it is not this user's novel claim. It seems that overall the CFTC and the NYAG are presenting materially different event time lines, so as an outsider it's a bit unclear what is actually happening.
- jordanb 2mo agoEasy: the CFTC is not credible. The online gambling industry put their guy in charge of the CFTC (Michael Selig). Their main goal is to preempt all state regulation of their gambling platforms. To that end Selig is promoting the novel theory that sports betting is trading of commodities and therefore should be "regulated" solely by his agency.
- jambalaya8 2mo agoSelig should leave.
- mminer237 2mo agoNew York did file for a TRO: https://storage.courtlistener.com/recap/gov.uscourts.nysd.669650/gov.uscourts.nysd.669650.1.3.pdf https://storage.courtlistener.com/recap/gov.uscourts.nysd.66...
- tripletao 2mo agoI think the point of confusion or obfuscation is that Kalshi is headquartered in NYC, so an order prohibiting them from offering bets/contracts "within or from New York" has the effect of prohibiting them nationwide. They could move to a friendlier state, but they presumably would rather not.