Second Circuit denies Kalshi and Coinbase interim relief against New York and Connecticut

The Second Circuit has denied Kalshi and Coinbase interim protection from New York and Connecticut while their appeals are ongoing. This ruling allows both states to proceed with their state-court cases against the companies, concerning their sports event contracts. The decision intensifies a circuit split that may ultimately reach the Supreme Court.

The Second Circuit ruled that the companies failed to meet the necessary requirements for an injunction pending appeal. The order did not specify which part of the required showing they did not fulfill. The ruling came shortly after the panel heard arguments from Kalshi, Coinbase, the CFTC, New York, and Connecticut. Kalshi had already lost at the district level, with federal courts denying it a preliminary injunction in New York in July and in Connecticut in August.

The stakes are high in New York, with the state case seeking billions of dollars in damages and the CFTC warning Kalshi to ignore the state-court order if it ever becomes effective.