Key facts
- Connecticut filed a lawsuit against Kalshi to block sports event contracts.
- The state alleges Kalshi is operating an illegal sports wagering service.
- A federal judge previously ruled that Kalshi's sports contracts are 'sports wagers'.
- Kalshi has appealed this ruling and moved the state lawsuit to federal court.
- Connecticut's request for a temporary restraining order was denied.
- Multiple other states have also taken legal action against Kalshi's sports contracts.
Connecticut has filed a lawsuit against the prediction market platform Kalshi, seeking to prevent it from offering sports event contracts to state residents. The lawsuit, filed by Connecticut Attorney General William Tong, alleges that these contracts constitute unlicensed sports betting and seeks injunctive relief, disgorgement, restitution, and civil penalties.
This action follows a December 2025 cease-and-desist order and a recent federal court decision where US District Judge Vernon Oliver denied Kalshi's attempt to block state enforcement. Judge Oliver ruled that the sports contracts are indeed 'sports wagers' and that the Commodity Exchange Act does not preempt Connecticut's gambling laws. Governor Ned Lamont stated that these markets pose serious risks to consumers, young people, and those with gambling addictions, emphasizing the company's pursuit of profits over people.
Kalshi has appealed the federal ruling to the Court of Appeals for the Second Circuit and subsequently moved the state lawsuit to federal court. However, Connecticut attorney Joseph Gasser quickly filed a notice of appearance, indicating a swift response from the state, potentially including a motion to remand the case back to state court and consolidate it with related actions before Judge Oliver.
Kalshi's Head of Litigation, Jovy Dedaj, criticized the lawsuit as "arbitrary and inconsistent enforcement," suggesting that Connecticut is unfairly targeting Kalshi while allowing other prediction markets to operate. Dedaj argued that this unequal treatment highlights the need for federal CFTC oversight. Sports betting lawyer Daniel Wallach noted that Connecticut also sought an ex parte temporary restraining order, which was denied by Hartford Superior Court, meaning the platform can continue offering sports event contracts in Connecticut for now.
Kalshi faces similar legal challenges in other states, including New York, Massachusetts, Nevada, and Michigan, which have sued the company or obtained orders limiting its sports contracts. Meanwhile, the CFTC has asserted its exclusive authority over designated contract markets like Kalshi, suing several states, including Connecticut, and directing Kalshi to continue operating while appeals are pending.