Second Circuit Won’t Pause New York, Connecticut Actions Against Kalshi and Coinbase

The Second Circuit declined Tuesday to pause enforcement actions brought by New York and Connecticut against prediction-market firms Kalshi and Coinbase, denying interim relief in a two-page order while leaving the companies' federal preemption argument unresolved. The ruling allows state regulators to proceed with cases challenging whether the firms' event contracts fall under state gambling oversight or exclusive federal jurisdiction. The decision keeps both platforms exposed to state-level enforcement as they defend their federal preemption claims on the merits. What to watch next is whether the appeals court ultimately takes up the preemption question and whether the underlying state actions advance while that legal uncertainty persists.