CFTC reportedly warns Kalshi of possible charges; NY judge denies Novig injunction

Reports said the Commodity Futures Trading Commission (CFTC) has given Kalshi a private warning of possible enforcement charges tied to how it notified the agency about new contracts. Separately, on July 31, 2026, a federal judge in New York rejected Novig's bid for a preliminary injunction against state officials.

Both developments land after the CFTC proposed a swap definition covering sports event contracts, as covered in our earlier report.

What happened

Kalshi. According to Gambling Insider's roundup of reports from Politico and Reuters, the CFTC told Kalshi it could be charged over possible failures to notify the agency properly about new contracts. Politico cited a person with direct knowledge as saying the probe has been running for months and involves dozens of contracts. No charges have been announced, and a settlement is also possible, the report says.

Kalshi spokesperson Elisabeth Diana told Politico the warning related to "a procedural error involving the submission of a handful of contracts, many of which weren’t live." She said the company is already dealing with it.

Novig. In a ruling dated 10 November in the Southern District of New York, Judge Colleen McMahon denied Novig's motion. At the preliminary injunction stage, she found that the Commodity Exchange Act does not classify its sports event contracts as swaps. On that basis, the opinion says, New York can apply its gambling and sports-wagering laws, requiring Novig either to obtain a state licence or to stop listing and trading those contracts on its designated contract market.

The opinion records that the CFTC designated Novig as a contract market in June 2026 and that Novig began offering sports event contracts to New York customers in August 2026. It also notes that Novig held a Colorado sports betting licence in 2023 before returning it.

The court noted that the CFTC's October 2026 publications included a proposed rule extending the swap definition to sports-related event contracts and an interim final rule stating that swaps do not include gambling products of a casino type, such as sports-wagering contracts on a sportsbook. According to the opinion, the CFTC did not identify differences between sports event contracts and sports-wagering contracts. Gambling Insider reports that the judge also criticised a CFTC emergency order directing Kalshi to keep operating in New York, describing it as suggestive of a collusive effort to create a preemption claim.

The opinion adds that a Second Circuit motions panel refused to grant an injunction while appeals proceed in three consolidated cases filed by Kalshi and Coinbase. The issue will go next to a merits panel, with no oral argument date set.

Why it matters

Operators and affiliates promoting sports event contracts to people in New York should check their licensing and marketing position now. The opinion cites a state law that bars advertising or promoting an unlicensed sports wagering platform to people located in the state, and it records New York's earlier enforcement steps against Kalshi, Coinbase Financial Markets and Gemini Titan.

For exchange operators, the Kalshi warning suggests contract-notification compliance could draw CFTC scrutiny. Firms listing large numbers of contracts could face questions about their filing records.

The Novig ruling is a preliminary one and does not settle the wider question. It could, however, give New York a ruling it can point to in further enforcement.

What's next

The CFTC has not announced any charges against Kalshi, and a settlement remains possible. The Second Circuit has not scheduled oral argument in the Kalshi and Coinbase appeals.