Connecticut Judge Rules Kalshi Sports Parlays Constitute Gambling Equivalent to Casino Games

A Connecticut federal judge has ruled that sports parlay contracts offered by Kalshi amount to gambling rather than swaps regulated under federal commodities law. Judge Vernon D. Oliver denied the company’s motion for a preliminary injunction. Oliver determined that the contracts do not qualify as swaps under the Commodity Exchange Act (CEA). The opinion adds that Connecticut gambling laws would not be preempted even if the contracts met the CEA definition.

Kalshi has appealed to the Second Circuit and requested an injunction halting state enforcement. The company first sued Connecticut regulators in December 2025 after the state issued a cease-and-desist letter, according to reporting by Casino Beats.

No Principled Distinction Between Parlays and Casino Wagers

Oliver noted that Kalshi itself would not list a contract on whether a player at a blackjack table wins their hand because it would be very difficult to argue that that is not gaming. The judge found no principled reason why a combo on both the Giants and Broncos winning differs. Both transactions, Oliver wrote, may have no independent financial, economic, or commercial consequence apart from their significance to participants in the market.

The opinion states that casino gaming could arguably carry more significant financial consequences for the casino, the player, or others with contractual or commercial interests. Oliver concluded that accepting Kalshi‘s position would mean virtually any uncertain event with economic ramifications qualifies as a swap. This outcome conflicts with congressional intent behind the Dodd-Frank Act amendments to the CEA.

A Kalshi lawyer took the opposite position in 2024 while defending election markets. The lawyer described a contract on a sporting event as a classic example of gaming which the CEA prohibits. The lawyer added, Congress did not want sports betting to be conducted on derivatives markets.

Volume Leadership and the Prospect of Supreme Court Review

Parlays now lead Kalshi volume. Users traded $3.2 billion on parlays over the last seven days, more than the $3.07 billion in individual sports markets. The categories accounted for 77% of the platform’s total volume.

The Connecticut decision means nine states could block the operator. Utah became the eighth state last week. Adverse rulings have issued in Nevada, Michigan, New York, Maryland, Massachusetts, Ohio, and Washington. Kalshi has obtained favorable rulings in New Jersey and Tennessee. A Minnesota decision blocked a broader ban but left sports betting enforcement open.

All negative rulings face appeal. The accumulating decisions increase the likelihood that the Supreme Court will resolve whether these event contracts are permissible under federal law. Until then, operators face fragmented state-level barriers that limit nationwide deployment regardless of platform volume.

Reporting: Casino Beats

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