Connecticut Judge Rules Against Kalshi Injunction Bid
David Genge Published 20/08/2026
A Connecticut judge ruled against Kalshi's request for a preliminary injunction, ruling that the platform's sports-event contracts are wagers and not swaps under federal commodity law. U.S. District Judge Vernon Oliver denied Kalshi's request for a preliminary injunction in Connecticut. The decision means Connecticut's gambling laws are not preempted by the federal Commodity Exchange Act. It allows the state's enforcement action to proceed.
Kalshi will be required to geofence its sports-event contracts in Connecticut, or face punitive action from the state gaming commission. Connecticut is the latest state to win a court battle requiring that Kalshi shelve its sports-event contracts product in that state.
Connecticut judge rules that Kalshi's sports-event contracts are sports betting
In Connecticut, all gaming is licensed and regulated by the Department of Consumer Protection (DCP). That state agency has successfully argued that Kalshi’s sports-based event contracts are unlicensed sports wagering. By convincing Judge Oliver to agree with this assessment, it was verified that the DCP has the legal right to regulate Kalshi for offering illegal sports betting.
The Commodity Futures Trading Commission (CFTC) is the federal regulator of prediction market sites like Kalshi. They have argued that the sports-event contracts are derivative swaps governed by the Commodities Exchange Act (CEA). Judge Irving is the latest arbiter to disagree with this assessment.
“The Court ‘must exercise independent judgment in determining the meaning of statutory provisions,’” Oliver wrote, according to reporting from The New Republic. “It has done so here in finding that Connecticut’s gambling laws do not conflict with the CEA. Nothing in the CEA takes away statutory interpretation from the Courts, and as an administrative agency, the CFTC lacks the authority to dictate an order that conflicts with this Court’s decision.”
Connecticut is already preparing for the next court battle
Kalshi isn't taking defeat lying down. The prediction market site already unsuccessfully launched an appeal in the District Court for the District of Connecticut. They were again seeking a temporary injunction pending appeal. This request was denied on August 15.
Undaunted, Kalshi then moved for an injunction pending appeal. This time, the company was requesting "emergency relief as soon as possible."
Connecticut Assistant Attorney General Joseph Gasser fought back. He is arguing that the courts have been there and done that by denying Kalshi's previous attempts to obtain a temporary injunction.
"Based on the similarity of issues and the procedural posture, Defendants-appellees respectfully submit that the Court should do likewise here, denying the extraordinary administrative relief Kalshi seeks and referring the Motion for a hearing," wrote Gasser. “Kalshi fails to demonstrate a basis for an injunction pending appeal, let alone ‘emergency’ administrative relief pending consideration of the instant Motion.”
Prominent gambling attorney Daniel Wallach obtained the letter to the court.
The courts keep on shutting down Kalshi
The law is all about precedents. Currently, prediction market sites are coming out on the wrong end of legal arguments over whether sports-event contracts are sports betting.
Connecticut is the latest state moving in the direction of being able to block Kalshi from offering sports-event contracts in the state.
Washington, Nevada, Michigan, Utah, and New York have all won court battles against Kalshi. Each state now requires Kalshi to implement some level of geofencing on its product. In Nevada, the state won an outright ban on Kalshi.
Some form of legal battle between prediction market sites and state regulators is ongoing in nearly half of the 50 US states.