Connecticut Federal Court Denies Kalshi Preliminary Injunction Over Sports Event Contracts

A Connecticut federal judge denied Kalshi’s motion for a preliminary injunction against state enforcement, ruling that the company’s sports event contracts qualify as sports wagers rather than swaps under federal commodity law. U.S. District Judge Vernon Oliver issued the August 10 order in response to a lawsuit Kalshi filed against Connecticut Attorney General William Tong and the Connecticut Department of Consumer Protection.

Oliver determined that the contracts fall outside the Commodity Exchange Act (CEA) and that the statute does not displace Connecticut’s authority to regulate sports wagering. The decision follows an initial stay that had allowed Kalshi to continue operations pending full review of the injunction request.

Core Reasons for Denying Relief

Oliver wrote that Kalshi characterizes its sports-related event contracts in various ways, but at bottom, they are sports wagers. The court declined to classify these contracts as swaps under the CEA or to find that Congress displaced state authority over sports wagering in favor of the Commodity Futures Trading Commission, an agency with no history of regulating sports wagering or exercising meaningful oversight of Kalshi’s contracts.

The ruling noted that the term event contract is not defined in the CEA or CFTC regulations. Oliver concluded the contracts depend on outcomes within sporting events rather than the occurrence of the events themselves and lack associated financial, economic or commercial consequences. He added that Congress did not intend the CEA to occupy the field of state regulation at issue here. The judge observed that Kalshi offered no good reason why it could not seek a state gaming license under Connecticut law.

Oliver further addressed Kalshi’s own distinction between sports and casino-style contracts. The company had suggested it would not offer contracts on whether a blackjack player wins a hand because that would constitute gaming with implications limited to the transaction participants. The court found no principled reason why a contract on both the Giants and Broncos winning differs in legal character.

Alignment With Rulings in Other States

The Connecticut order repeatedly references adverse decisions against Kalshi in other jurisdictions, signaling close attention by courts to this emerging litigation. Since late June, Kalshi has lost attempts to secure preliminary injunctions or faced temporary relief granted to states in Michigan, Nevada, New York, Utah and Washington. Rulings in Michigan and Nevada set an August 12 deadline for Kalshi to geoblock access to its sports contracts in those states. Coinbase received a similar rejection in Michigan.

The decision also notes ongoing federal appeals. The Court of Appeals for the Sixth Circuit heard oral arguments in combined cases from Ohio and Tennessee. During that hearing, Judge Eric Clay stated that there is no express statement in the CEA suggesting gaming regulation should transfer from states to the federal government.

This pattern of rulings underscores the legal obstacles prediction platforms face when asserting CEA preemption over state gambling laws. As first reported by SBC Americas, the Connecticut decision leaves Kalshi and similar operators with limited federal recourse absent further appellate success.

Reporting: SBC Americas

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