⚖ Oral Arguments, with Context

The Second Circuit hears Kalshi and Coinbase's requests to block state gambling enforcement while their appeals are pending. Kalshi is registered with the Commodity Futures Trading Commission, or CFTC, as a designated contract market, or DCM: an exchange. Coinbase is registered as a futures commission merchant, or FCM: a broker giving customers access to Kalshi's contracts. Here, people buy and sell yes-or-no positions on sports outcomes; the contracts pay according to whether those outcomes happen. New York and Connecticut directed Kalshi to stop what they described as unlicensed sports wagering. Kalshi challenged those directives in federal court, and Coinbase separately challenged Connecticut's authority over the same contracts. The district courts denied preliminary injunctions, leaving the companies without the temporary protection they sought. The central issue is preemption: whether federal law displaces state law. The companies say these contracts are swaps under federal commodities law, bringing them under the CFTC's exclusive regulation. The states say their gambling laws still apply. Much of the argument concerns the statutory requirement that a swap's underlying event have a potential financial, economic, or commercial consequence. Does a sporting outcome meet that requirement, or does that reading sweep in ordinary sports betting too? The judges will also consider irreparable harm, meaning injury that cannot adequately be repaired later, and balance the companies' claimed business harms against the states' arguments about protecting residents. These requests concern protection during the appeals, not final decisions on the full cases.

KalshiEX / Coinbase v. New York & Connecticut Officials (No. 26-1835, 26-2239, 26-2297) — U.S. Court of Appeals for the Second Circuit, argued November 3, 2026.