Judge Temporarily Blocks Connecticut from Enforcing Gambling Laws Against Kalshi
U.S. District Court Judge Victor Bolden has issued a temporary order preventing Connecticut regulators from enforcing state gambling laws against Kalshi while the company pursues a preliminary injunction. Oral arguments in this matter are scheduled for February 12, 2026.
Connecticut's Department of Consumer Protection previously issued cease-and-desist letters to Kalshi, Robinhood, and Crypto.com, alleging they engaged in unlicensed online sports gambling. These letters directed the platforms to stop offering sports event contracts to Connecticut residents.
Kalshi contends that its designation as a contract market by the Commodity Futures Trading Commission (CFTC) grants it exclusive federal jurisdiction, and thus, the state gambling laws are preempted by the Commodity Exchange Act. In contrast, Connecticut argues that Kalshi’s contracts violate state gaming laws and invokes state gaming and consumer protection statutes to support enforcement.
Kalshi points to a New Jersey ruling in April that granted a preliminary injunction, which supports Kalshi's argument that CFTC's exclusive jurisdiction preempts state gaming laws for designated contract markets. However, Kalshi faced a setback in Nevada where it lost a preliminary injunction; although regulators paused enforcement during the appeal process. Meanwhile, Crypto.com and Robinhood have reached agreements with regulators to pause enforcement pending their appeals. Kalshi has faced criticism for not halting operations in Nevada.
The court briefing schedule requires Connecticut to file its response to Kalshi’s motion by January 9, 2026, with a reply from Kalshi due by January 30, 2026.
Separately, Polymarket, which competes with Kalshi, was cleared by the CFTC to resume U.S. operations last month. According to a Myriad sentiment market, nearly 70% of users favor Polymarket over Kalshi.
