Connecticut filed a lawsuit against Kalshi prediction market, asking a state court to block the prediction market from offering sports event contracts to residents. The platform now faces enforcement actions in multiple states, including New York.
Connecticut Sues Kalshi Alleging Illegal Sports Wagering
Connecticut Attorney General William Tong, Governor Ned Lamont, and the Department of Consumer Protection allege that Kalshi’s sports event contracts are unlicensed sports betting. The state seeks injunctive relief, disgorgement, restitution and civil penalties against Kalshi for operating an illegal sports wagering service.
The lawsuit follows a December 2025 cease-and-desist order and a federal court loss for Kalshi earlier this month. Notably, US District Judge Vernon Oliver denied Kalshi’s bid to block state enforcement, finding the sports contracts are “sports wagers” and that the Commodity Exchange Act does not preempt Connecticut gambling law.
“These prediction markets put Connecticut consumers, young people, our student athletes, and those suffering from gambling addiction at serious risk. They have made it clear their goal is profits over people, and that’s why we are holding them accountable,” said Gov. Ned Lamont.
Notably, Kalshi has appealed that ruling to the Court of Appeals for the Second Circuit. The prediction market also removed the latest case to federal court. However, Connecticut attorney Joseph Gasser immediately submitted a notice of appearance in the removed federal action, directing it to Judge Oliver.
Connecticut attorney Joseph Gasser wastes no time in filing a notice of appearance in the removed federal action, which hints at a fast response by CT, perhaps the filing of a motion to remand before the end of the week and steering it to Judge Oliver as a related case. https://t.co/KhluyS45Z2 pic.twitter.com/93miHVX3ps
— Daniel Wallach (@WALLACHLEGAL) August 27, 2026
Legal Head Calls the Lawsuit “Arbitrary and Inconsistent”
Kalshi Head of Litigation Jovy Dedaj called the new state lawsuit “the latest in a line of arbitrary and inconsistent enforcement,” saying Connecticut is “okay with other prediction markets operating there in the meantime.” Dedaj argued the unequal treatment shows why federal CFTC oversight is needed.
Sports betting and gaming lawyer Daniel Wallach revealed that Connecticut also filed an ex parte temporary restraining order against Kalshi.
However, Hartford Superior Court denied the order, which would have forced the prediction market to take down its sports event contracts in Connecticut immediately.
States including New York, Massachusetts, Nevada, Michigan, and others have sued Kalshi or won orders limiting sports contracts. New York’s attorney general sued in state court in July after a federal judge denied Kalshi an injunction.
However, the CFTC has sued multiple states, including Connecticut in April, contending exclusive authority over designated contract markets such as Kalshi. As CoinGape reported earlier, the CFTC directed Kalshi to ignore state court orders and continue operating. The regulator exercised its emergency authority under the Commodity Exchange Act while appeals are pending.
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