A U.S. judge has given Kalshi a temporary victory by halting enforcement actions from the Connecticut Department of Consumer Protection (DCP). The ruling pauses the state’s attempt to stop the platform from operating while the case continues.
Kalshi, a federally regulated prediction markets platform, received a cease-and-desist order last week. The state accused Kalshi, Robinhood, and Crypto.com of offering unlicensed online gambling in Connecticut through sports-related event contracts.
Kalshi quickly responded by suing the DCP, claiming its contracts are legal under federal law. The company argued that its platform falls under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC). Kalshi also filed a motion asking the court to temporarily block the state’s enforcement efforts.
In Monday’s order, Judge Vernon Oliver instructed the DCP to stop taking any action against Kalshi while the court reviews the request for a preliminary injunction. The judge also set deadlines: the DCP must submit a response by January 9, and Kalshi must provide additional support for its motion by January 30. Oral arguments are scheduled for mid-February.
Kalshi Faces Challenges Across Multiple States
Kalshi operates nationally under CFTC regulation and began offering contracts tied to events, including sports and politics, earlier this year. The platform has grown rapidly, reaching $4.54 billion in monthly trading volume in November and recently raising $1 billion in new funding at an $11 billion valuation.
Despite its growth, Kalshi is facing pushback from several U.S. states. Regulators in New York, Massachusetts, New Jersey, Nevada, Maryland, and Ohio have taken action or issued warnings, arguing that some of Kalshi’s offerings may qualify as unlicensed gambling under state law. Kalshi has responded with lawsuits, accusing these state agencies of overstepping their authority.
