The gavel has fallen in Kalshi’s favour, at least temporarily. A federal judge has directed Connecticut regulators to pause their ruling against Kalshi, letting the court consider whether the prediction markets platform functions as a legitimate trading venue or an unlicensed casino.
Judge Vernon Oliver, from the Connecticut federal court, ruled on Monday that Connecticut’s Department of Consumer Protection must halt enforcement actions against Kalshi while the court examines the company’s motion for a preliminary injunction. The state had issued a cease and desist order on December 2, grouping Kalshi with Robinhood and Crypto.com in accusations of conducting illegal online sports wagering without proper licensing.
Kalshi fired back within 24 hours, filing a lawsuit and arguing its event contracts fall under federal commodities law and the exclusive oversight of the Commodity Futures Trading Commission (CFTC). The company has operated as a CFTC-regulated designated contract maker, offering contracts on sports outcomes and political events since January.
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The Connecticut case represents just one front in Kalshi’s expanding legal battlefield. The platform faces similar disputes in New York, Massachusetts, New Jersey, Nevada, Maryland, and Ohio. Despite regulatory problems, Kalshi has been growing, processing $4.54 billion in November trading volume and securing $1 billion in funding at an $11 billion valuation this month.
