Second Circuit Denies Coinbase, Kalshi Shield From State Prediction-Market Enforcement

The significance here is jurisdictional: federal courts are declining to preempt state regulators at this stage, which keeps prediction markets exposed to a patchwork of state enforcement even as they operate nationally. That matters most for Kalshi and Coinbase as platforms, and for the states testing whether their gaming and financial laws reach event contracts. The open question is whether this signals judicial reluctance to grant federal cover before the merits are resolved, and how aggressively Connecticut and New York pursue enforcement while trading continues uninterrupted.