Connecticut Targets Kalshi With Suit to Halt Sports-Event Trading

TL;DR

• Connecticut sued Kalshi seeking an injunction to stop sports-event contracts, arguing they amount to unlicensed sports wagering under gambling and consumer protection laws.
• Kalshi says its CFTC-designated market status places the products under federal derivatives oversight, while a judge denied its preliminary injunction request and Kalshi appealed.
• More than a dozen states have challenged Kalshi, while Washington and Baltimore also took action, intensifying the national jurisdictional fight over prediction markets.

Connecticut has sued Kalshi to stop the prediction-market platform from offering sports-related event contracts, escalating a months-long legal fight. Attorney General William Tong said the state is seeking a court injunction requiring Kalshi to halt what Connecticut calls unlicensed sports wagering, while Governor Ned Lamont warned that such markets pose risks to consumers and young people. Tong argued that sports event contracts are no different from sports betting and are not shielded from state consumer protection laws. The dispute turns on whether these contracts are regulated derivatives or sports betting subject to Connecticut gambling laws.

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