Judge Backs Kalshi in Connecticut Betting Dispute

Crypto News Regulation

Federal Judge Sides With Kalshi in Connecticut Betting Dispute

Written by Aaron S.,

Editor-In-Chief

Last Updated: December 10, 2025

Key Takeaways

A federal judge temporarily blocked Connecticut from enforcing its stop order against Kalshi, which allowed the platform to keep operating;
Connecticut argued Kalshi’s event contracts were illegal gambling, which required a state gaming license despite CFTC oversight;
Kalshi claimed federal law preempts state regulation and warned state restrictions could harm its nationwide business model.

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Federal Judge Sides With Kalshi in Connecticut Betting Dispute

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Kalshi, a regulated prediction market, received a temporary reprieve on December 8 when a US federal judge ruled that the Connecticut Department of Consumer Protection cannot enforce its stop order against the company.

The state agency had tried to halt Kalshi's operations by demanding that the platform cease offering event contracts related to political events and sports to residents in Connecticut.

According to filings, Connecticut's order focused on Kalshi's "event contracts", which the state sees as unregulated betting because they allow users to place money on the outcome of real-world events.

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The agency maintains that offering these products without a gaming license is not allowed under state law, even if the platform is registered with a federal agency such as the Commodity Futures Trading Commission (CFTC).

The ruling followed Kalshi’s argument that the federal Commodity Exchange Act overrides state authority in this area.

In its argument, Kalshi claimed that Connecticut's enforcement would disrupt its business on a national scale, since prohibiting access to residents in one state could affect future regulatory approaches elsewhere.

The company pointed out that the products were reviewed and overseen by the CFTC and that its contracts differed from typical gambling contracts, as they were subject to federal commodity laws rather than local gaming statutes.

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