Kalshi Pushes to Tie New York Prediction Market Cases Together as AG Alleges “Gamesmanship”
Kalshi is seeking to consolidate multiple New York prediction market lawsuits under a single judge. Meanwhile, the state argues the move is an attempt to sidestep another federal judge’s procedural rulings.
Kalshi is attempting to tie several major New York prediction market cases before a single federal judge. New York regulators have pushed back, accusing the company of trying to circumvent another judge’s procedural rulings.
In a May 13 filing in the Southern District of New York, Kalshi asked Judge Analisa Torres to designate three recently filed cases as “related” to its ongoing lawsuit against New York regulators.
The request covers the Commodity Futures Trading Commission (CFTC) lawsuit against New York, as well as the lawsuits by New York Attorney General Letitia James against Coinbase and Gemini.
Kalshi argued the cases all center on the same core issue: whether the Commodity Exchange Act (CEA) preempts New York from applying state gambling laws to federally regulated event contracts traded on designated contract markets (DCMs).
The filing also warned of a “significant risk of conflicting orders” if separate judges independently rule on the same federal preemption question, especially as plaintiffs are seeking the identical relief.
Kalshi Signals Potential Consolidation Effort
The filing focused on procedural “relatedness” under Rule 13 of the Rules for the Division of Business Among District Judges. However, Kalshi stated that if the Court grants its request and deems the cases related, it will “promptly confer with counsel in those actions concerning potential consolidation.”
Potential consolidation could significantly impact briefing schedules, procedural sequencing, and which judge ultimately oversees key preemption rulings.
Kalshi framed the consolidation as necessary to avoid duplicative litigation and inconsistent rulings. It pointed to a growing split among courts over whether event contracts fall under the CFTC’s exclusive oversight or state gambling laws.
The company cited favorable rulings from the Third Circuit and the federal courts in Arizona and Tennessee. It also acknowledged conflicting decisions in Nevada and Ohio.
New York AG Accuses Kalshi of Procedural “End-Run”
New York regulators responded the next day with a sharply worded opposition letter, accusing Kalshi of procedural gamesmanship.
The Attorney General’s office argued the request was not about efficiency. Instead, it was an attempt to circumvent rulings already issued by Judge Victor Marrero, who is overseeing the Coinbase, Gemini, and CFTC cases.
The state pointed out that Judge Marrero recently delayed consideration of anticipated consolidation motions until after pending motions seeking to remand the Coinbase and Gemini cases back to state court are resolved.
New York argued that Kalshi is now attempting to bypass that process by seeking related-case treatment before a different judge. It wrote that the company’s:
Effort will end-run the existing adjournment of anticipated motions to consolidate the cases pending before Judge Marrero until he addresses remand, and is contrary to the interests of justice.”
The state also emphasized that despite filing related case notices linking the Coinbase and Gemini matters, the CFTC did not seek to relate those actions to Kalshi’s existing lawsuit.
New York argued that the omission was instructive and “perhaps most significant.” It suggested that even the federal plaintiffs viewed the cases as procedurally unrelated.
The filing further noted that Kalshi waited nearly three weeks after the related cases were assigned to Judge Marrero before the filing. During that time, Marrero had already issued rulings concerning briefing schedules and the sequencing of motions.
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