The Only Question Argued in New York's Kalshi Case Is Which Courthouse Hears It

New York's lawsuit against KalshiEX LLC has been in federal court since the day it was filed, and as of September 2, 2026 the only motion in it that both sides have finished arguing is about where the case should be heard. The state filed its reply memorandum on August 28, 2026 (Dkt 22), closing briefing on its motion to return the proceeding to New York County Supreme Court. That reply is the last substantive entry on the docket.

The case is 1:26-cv-06550 in the Southern District of New York, before Judge Vernon S. Broderick, who took it on August 10, 2026 after Judge Analisa Torres declined it as not related to the earlier Kalshi suit on her docket. Attorney General Letitia James moved to remand on August 7 (Dkt 16), with a supporting memorandum of law filed the same day (Dkt 17); Kalshi filed its opposition on August 21 (Dkt 21). Underneath all of that is a state enforcement action: James brought it in Supreme Court, New York County on July 31, 2026 under Executive Law section 63(12), and Kalshi removed it to federal court the same day.

What a remand motion actually asks

A motion to remand asks the federal court to send a removed case back to the state court it came from. It is a question about forum, and it is answered before anything in the underlying dispute is. Until it is answered, the case has a judge but not yet a settled home.

The chronology that produced this petition is on the record in the petition itself. On October 24, 2025 the State Gaming Commission demanded that Kalshi cease and desist from operating an unlicensed mobile sports wagering platform in New York. Three days later Kalshi sued the Commission and its commissioners in this district, in 25-cv-08846, asking a federal judge to stop enforcement of that demand. On October 28, 2025 the Commission agreed to refrain from enforcement action against Kalshi over the conduct described in the demand until the injunction request was decided. That ruling came on July 7, 2026, when Judge Torres denied the motion; the opinion was corrected in part on July 13, an appeal was docketed on July 8, and a further request for an injunction pending appeal was denied on July 27. The Attorney General filed the petition four days after that, and it was in federal court the same day.

Everything the parties have filed since goes to the transfer or to housekeeping. The federal docket between August 3 and August 28, 2026 carries the case-opening notice with no judge attached, the electronic filing designation, the referral to Judge Torres, appearances by one lawyer for Kalshi and two assistant attorneys general for the state, a pro hac vice application the clerk's office bounced on August 17 for a missing proposed order and that Judge Broderick granted the next day once it was refiled, and the remand papers. There is no answer to the petition on it and no motion directed at what the petition alleges.

What the petition asks for, and what nobody has answered

Executive Law section 63(12) is the whole basis of the state's case. It authorizes the Attorney General to apply for an order enjoining the continuation of repeated fraudulent or illegal acts in the carrying on, conducting or transacting of business affecting the interests of the public within New York, expressly by action or by proceeding, and it lets the office ask for restitution, disgorgement, damages, injunctive relief and costs when a business has engaged in repeated illegal acts or otherwise shown persistent illegality. The petition invokes it in its first sentence and pleads every count through it.

There are eight causes of action, and each is framed as repeated and persistent illegality under section 63(12). They run through Article I, Section 9 of the State Constitution, which the petition reads as prohibiting gambling not specifically enumerated there; Penal Law sections 225.05, 225.10 and 225.20, covering promoting gambling and possessing gambling records; three Racing Law provisions, sections 1367(16)(a), 1367-a(2)(a) and 1367-a(4)(b), which govern who may offer sports wagering in New York, who may make a mobile sports wagering platform available to people located here, and who may operate or advertise an unlicensed platform; and the federal Interstate Wire Act, 18 U.S.C. section 1084(a). Paragraph 10 carries the allegation the whole pleading turns on: that Kalshi is not licensed by the New York State Gaming Commission in any capacity.

What a licence would mean is set out in the petition's account of the statute. New York built its mobile sports wagering regime in 2019, after the Supreme Court's decision in Murphy v NCAA, and the petition describes nine licensed mobile operators working under it. Wagers placed by electronic means have to be transmitted to and accepted by equipment located at a licensed commercial casino inside the state. Anyone under 21 is a prohibited bettor. A licensee may not take a wager on a prohibited sports event, a category the Racing Law defines to include any sport or athletic event in which a New York college team participates, wherever the game is played. Those are the conditions the petition says Kalshi is not subject to, because on its account the company holds no licence at all. None of that is in front of Judge Broderick yet.

The relief is equally specific. James asked for an order permanently enjoining Kalshi from operating a gambling business in New York without a Gaming Commission licence, for an accounting identifying each customer and itemising bets placed, customer losses and the company's gains, for restitution and disgorgement, for damages, for a penalty of three times the company's gain under Penal Law section 80.10, and for a penalty of one hundred thousand dollars for each offer or attempted offer of sports wagering in New York without authorisation under Racing Law section 1367(16)(a). None of that has been briefed. None of it has been ruled on. Five weeks after the petition was signed, the case is waiting on a question that is nowhere in it.

How the case reached a third judge

The assignment history is the reason there are now several New York exchange cases in front of several judges rather than one. The federal case opened on August 3, 2026 with no judge attached, was designated for electronic filing, and was referred that day to Judge Torres as possibly related to 25-cv-08846, the suit Kalshi itself brought against the Gaming Commission and its commissioners on October 27, 2025. The referral went out the same day the case was designated for electronic filing, before any judge had been assigned to it at all.

On August 10 Judge Torres declined the case as not related and returned it to the wheel. It was reassigned to Judge Broderick the same day, and Magistrate Judge Sarah L. Cave was designated for any matters referred. That is the sequence the state's remand motion arrived into three days earlier, and it is why the judge deciding where this case belongs is neither the judge who has had the underlying legal question in front of her since October 2025 nor a judge of the court where the petition was filed.

The market is reading a different question

Kalshi is also the only exchange pricing New York's governor party contract, which on September 2, 2026 sat at 94% for a Democratic winner and 7% for a Republican one. Those numbers are a read of the November 3 election and not of the licensing question, and the difference matters here: the relief James asked for would reach how Kalshi operates in this state, not who takes the governorship, so a remand ruling in either direction leaves the governor prices where the campaign puts them. The live board sits on the New York governor market page.

What a remand ruling would settle is narrow and procedural. It would fix which courthouse hears the petition and under which rules, and it would start the clock on the answer, the motions and the schedule that follow. It would not decide a single one of the eight counts, and nothing on the docket suggests otherwise.

Two other exchanges, two other postures

New York is defending itself in two more prediction market cases in the same courthouse, and neither is on the same footing as this one. North American Derivatives Exchange, Inc., trading as OG, has a preliminary injunction motion set for argument before Judge Lorna G. Schofield on September 14, 2026, covered in the hearing that tests the state's enforcement power. Ludlow Exchange, LLC is before Judge Colleen McMahon, who denied its restraining order without asking the state to reply and set New York's first brief for September 10, 2026, covered in the Ludlow briefing schedule. In those two the state is the defendant and an exchange is asking a federal judge to stop it acting. In this one the state is the petitioner and has not yet reached its own claims.

What is next, and when

No date is set for a decision on remand. The next fixed marker in Kalshi's New York litigation is at the Second Circuit, where the company's appeal from Judge Torres's July 7, 2026 denial of its own injunction request is docketed as No. 26-1835. Kalshi filed its opening brief and a two-volume joint appendix on August 31, 2026, and a scheduling notification so-ordered on September 1, 2026 set the brief for the state officials as due October 30, 2026. That appeal is a separate case from the Attorney General's, and it has already produced two dated refusals of emergency relief: Judge Torres denied an injunction pending appeal on July 27, 2026, and on July 29 the Second Circuit denied temporary administrative relief and referred the motion to a three-judge panel. Filings in every New York exchange matter are listed on the legal status page.