Kalshi Secures Legal Victory, Pausing Connecticut Gambling Order

TLDR

• Kalshi won a temporary halt to Connecticut’s gambling enforcement order.
• A federal judge ruled Kalshi’s event contracts fall under CFTC jurisdiction.
• Kalshi faces multiple legal challenges in states like New York, Massachusetts, and New Jersey.
• The platform’s trading volumes exceeded $1 billion daily, showing rapid growth.
• Kalshi’s recent partnership with CNN boosts its media presence amid legal disputes.

Kalshi, a prediction markets platform, has secured a temporary halt in enforcement against Connecticut’s gambling order. A federal judge intervened after Connecticut’s Department of Consumer Protection (DCP) accused Kalshi of offering unlicensed gambling services. The legal conflict revolves around whether Kalshi’s event contracts fall under the Commodity Futures Trading Commission (CFTC) jurisdiction, rather than state gambling laws.

Judge Halts Connecticut’s Gambling Action Against Kalshi

A federal judge, Vernon Oliver, ruled in favor of Kalshi on December 8, blocking Connecticut from enforcing its gambling order that was reported by Blockonomi earlier. The state had issued a cease-and-desist notice to Kalshi on December 2, accusing the platform of operating online sports event contracts without proper licensing. Kalshi responded by filing a lawsuit, arguing its products are federally regulated financial instruments, not forms of gambling.

Kalshi’s lawsuit claims that its event contracts are subject to CFTC jurisdiction, not state gambling laws. The company contends that its products, which include markets related to sports, weather, and political events, fall under federal oversight. “The CFTC has exclusive jurisdiction over Kalshi’s markets,” said Kalshi in a statement, further reinforcing their stance that state regulations do not apply.

The court’s ruling temporarily pauses state enforcement, allowing Kalshi to continue operating while the case progresses. Under the court’s schedule, Connecticut must respond by January 9, 2026, and Kalshi will present further arguments by January 30. Oral arguments are set for mid-February.

Kalshi Faces Multiple Legal Challenges Over Gambling Allegations

Kalshi’s legal battles are not limited to Connecticut. The company has faced similar challenges in other states, including New York, Massachusetts, and New Jersey. State regulators have questioned whether Kalshi’s contracts resemble sports bets, falling under gambling laws.

In October, Kalshi filed a lawsuit against the New York State Gaming Commission after receiving a cease-and-desist order. Kalshi argues that these actions violate the Commodity Exchange Act, which governs its federally regulated market. The company has also been involved in legal disputes with regulators in Maryland, Nevada, Ohio, and other states.

Kalshi Expands Amid Legal Uncertainty

Despite these challenges, Kalshi continues to expand its platform. Early this month, Blockonomi reported that the company recently secured a partnership with CNN, which will use Kalshi’s data for reporting on political and economic events. Kalshi’s trading volumes have surged, posting a record $4.54 billion in November.

Kalshi’s growth continues despite ongoing legal disputes over its gambling status. The platform’s expansion includes markets tied to various events, and its daily trading volumes exceed $1 billion. The company’s recent partnership with CNN signals growing recognition in the media industry.

However, legal uncertainty looms over Kalshi’s nationwide operations. While the court has temporarily blocked Connecticut’s gambling order, Kalshi still faces potential challenges in other states. The resolution of these legal battles will likely have broader implications for Kalshi’s future expansion and the regulation of prediction markets.

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