Connecticut has sued Kalshi seeking a court injunction to block the prediction market platform from offering sports-related event contracts, marking the latest escalation in a months-long legal feud over whether such products are unlicensed sports wagering or federally regulated derivatives.
Attorney General William Tong, Department of Consumer Protection Commissioner Bryan T. Cafferelli, and Governor Ned Lamont are asking the court to require Kalshi to stop offering the contracts in the state. Tong said sports event contracts are "no different than sports betting" and are not shielded by federal law from Connecticut consumer protection laws. Lamont added that legalizing sports wagering in 2021 aimed to create a regulated market, not open a "free-for-all on sports betting."
The dispute began in December 2025, when Connecticut’s Department of Consumer Protection ordered Kalshi, Robinhood, and Crypto.com to stop promoting and offering sports event contracts. Kalshi sued the state, arguing that its CFTC-designated contract market status gives federal regulators exclusive authority. Earlier this month, Judge Vernon Oliver denied Kalshi's preliminary injunction, and Kalshi has appealed to the Second Circuit. The CFTC and Department of Justice have also sued Connecticut, Illinois, and Arizona, with CFTC Chair Michael Selig vowing to defend federal oversight against "overzealous state regulators."
Kalshi head of litigation Jovy Dedaj called Connecticut’s action "the latest in a line of arbitrary and inconsistent enforcement," noting other prediction markets remain active in the state. The case is part of a broader crackdown: more than a dozen states have acted against Kalshi. Washington ordered Kalshi to stop prediction markets, a New York court denied an injunction, and Baltimore sued Kalshi and Polymarket, also naming Coinbase, Robinhood, and Webull.
