Connecticut has taken legal action to stop prediction markets platform Kalshi from offering sports-related event contracts, intensifying a dispute that has pitted the company against state regulators for several months.
The state is asking a court to issue an injunction requiring Kalshi to stop offering what Connecticut describes as unlicensed sports wagers, Attorney General William Tong said in a statement released on Wednesday.
“Sports event contracts are no different than sports betting and are not magically shielded by federal law from Connecticut’s commonsense consumer protection laws,” said Tong.
Connecticut Governor Ned Lamont said Kalshi’s markets posed a serious risk to consumers and young people in the state.
“When we legalized sports wagering in 2021, the goal was to create a safe, responsibly regulated market for Connecticut consumers, not to open a free-for-all on sports betting,” Lamont added.
Kalshi disputes Connecticut’s position. Jovy Dedaj, the company’s head of litigation, described the lawsuit in a post on X as “the latest in a line of arbitrary and inconsistent enforcement”.
She also accused the state of allowing other prediction-market operators to continue working there.
“This unequal treatment is exactly why federal oversight is necessary,” said Dedaj.
The Block has contacted Kalshi for further comment.
The latest case follows action by Connecticut’s Department of Consumer Protection in December 2025. The department ordered Kalshi, Robinhood and Crypto.com to stop promoting and offering sports event contracts.
Kalshi responded the next day by suing state officials. The company argued that its markets, which allow users to trade on the outcomes of future events, are derivatives products regulated by the Commodity Futures Trading Commission.
Kalshi received designated contract market status from the CFTC in 2020. On that basis, it argues that Connecticut’s gambling laws do not apply to its products and that state authorities are exceeding their legal powers.
Earlier this month, Judge Vernon Oliver rejected Kalshi’s request for a preliminary injunction that would have prevented enforcement action by Connecticut. Kalshi has appealed that ruling to the Second Circuit.
The dispute has also drawn in the CFTC. In April, the commission sued Connecticut, Arizona and Illinois, arguing that the states could not ban designated contract markets registered with the federal regulator.
“The CFTC will continue to safeguard its exclusive regulatory authority over these markets and defend market participants against overzealous state regulators,” CFTC Chair Michael Selig said at the time.
Connecticut is one of more than a dozen states to have either taken enforcement action against Kalshi or brought legal proceedings over its sports event contracts.
Elsewhere, a Washington court ordered Kalshi earlier this month to stop offering prediction markets linked to sports, elections, politics, entertainment, culture, technology and science in the state.
Baltimore, Maryland’s most populous city, also sued Kalshi and Polymarket this month. The city alleges that the companies’ sports-event contracts constitute illegal gambling.
The cases centre on whether contracts allowing users to trade on future outcomes should be treated as federally regulated financial products or as sports betting subject to state gambling laws.
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