Judge Torres from Ripple (XRP) Case Is Back At the Center of Another Big Legal Battle

U.S. District Judge Analisa Torres, widely known for her landmark rulings in the Ripple lawsuit, has once again become a central figure in a closely watched legal dispute involving financial markets.

This time, the case does not involve cryptocurrency directly but instead focuses on the growing prediction market industry and the legal boundaries between federal oversight and state gambling laws.

Former Fox Business journalist Eleanor Terrett reported that Judge Torres denied prediction market platform Kalshi’s request for a preliminary injunction in its case before the U.S. District Court for the Southern District of New York (SDNY).

The decision allows the lawsuit to move forward to the motion-to-dismiss stage after the court found that New York’s gambling laws, as applied to Kalshi’s sports event contracts, are not preempted by the federal Commodity Exchange Act.

Court Rejects Kalshi’s Federal Preemption Argument

Kalshi sought a preliminary injunction to prevent the New York State Gaming Commission from enforcing state gambling laws against its sports event contracts while the lawsuit was pending.

The company maintained that, as a federally regulated Designated Contract Market overseen by the Commodity Futures Trading Commission (CFTC), its operations fall under federal jurisdiction and should not be subject to conflicting state regulations.

Judge Torres rejected that position at this stage of the litigation. She concluded that New York’s gambling laws are not overridden by the Commodity Exchange Act when applied to Kalshi’s sports-related event contracts. As a result, the state remains free to enforce its gambling laws while the case continues.

With the injunction request denied, the lawsuit now advances to the motion-to-dismiss phase, where New York will seek to have Kalshi’s claims dismissed before the case proceeds further.

Legal Dispute Centers on Definition of Prediction Markets

The case highlights an ongoing disagreement over whether prediction markets should be treated as federally regulated financial products or as forms of sports betting governed by state gambling laws.

Kalshi has maintained that its event contracts differ from traditional sportsbooks because they operate through regulated financial market infrastructure, including order books and clearinghouses. Supporters of the platform have also described prediction markets as financial instruments that can serve hedging and price discovery purposes rather than conventional gambling.

New York officials, however, have taken the position that contracts tied to sports outcomes fall within the state’s gambling laws and should not operate without the appropriate state authorization.

Decision Could Influence Future Regulatory Battles

Terrett noted that Judge Torres’ ruling places the Ripple judge at the center of another significant legal battle involving financial regulation. Given her prominence following the Ripple case, the decision has attracted considerable interest from legal observers and market participants.

The ruling also strengthens the position of state regulators as similar disputes continue in other jurisdictions. Legal observers expect Kalshi to appeal the denial of the preliminary injunction while continuing to pursue its broader challenge against New York’s enforcement efforts.

As the case progresses, it is expected to contribute to the wider debate over how prediction markets should be regulated and whether federal commodities law or state gambling statutes should ultimately govern sports event contracts. The outcome could have implications not only for Kalshi but also for other companies operating in the expanding prediction market sector.

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