Kalshi secures temporary relief on Connecticut enforcement as legal fight escalates
Prediction markets platform Kalshi has secured a temporary pause on enforcement actions from Connecticut regulators, marking the latest development in its clash with state authorities over whether its event-based contracts constitute illegal online gambling.In an order issued Monday, U.S. District Judge Vernon Oliver directed Connecticut's Department of Consumer Protection (DCP) to hold off on pursuing enforcement action against Kalshi while the court reviews the company's request for preliminary relief. The ruling came after DCP issued cease-and-desist notices on Dec. 2 to Kalshi, Robinhood and Crypto.com, alleging the companies were offering unlicensed sports-related wagering.Subsequently, Kalshi responded by filing a lawsuit against Connecticut authorities one day later, arguing that its markets — which allow users to trade on outcomes of future events — are regulated derivatives products overseen by the Commodity Futures Trading Commission. Because the CFTC granted Kalshi designated contract market status in 2020, the company claims that Connecticut's gambling laws do not apply and that the state is overstepping its authority. The company also sought a temporary restraining order to prevent Connecticut from taking any action that could disrupt its operations."Connecticut's attempt to regulate Kalshi intrudes upon the federal regulatory framework that Congress established for regulating derivatives on designated exchanges," Kalshi said in the court filing.Judge Oliver's order grants Kalshi interim protection while the case moves forward. Under the schedule set Monday, Connecticut regulators must respond to Kalshi's complaint by Jan. 9, 2026, with the company due to file additional supporting arguments by Jan. 30. Oral arguments are expected in mid-February.Kalshi has encountered similar pushback in several states this year, including Arizona, Illinois, Montana and Ohio.Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.