A US judge has granted prediction markets platform Kalshi a temporary reprieve from enforcement, following a cease-and-desist order issued by the state of Connecticut last week over alleged unlicensed gambling activities.
On Dec. 2, the Connecticut Department of Consumer Protection (DCP) sent cease-and-desist orders to Kalshi, Robinhood, and Crypto.com, accusing the companies of “conducting unlicensed online gambling, more specifically sports wagering, in Connecticut through its online sports event contracts.”
Kalshi responded by filing a lawsuit against the DCP the following day, arguing that its event contracts “are lawful under federal law” and that the platform falls under the Commodity Futures Trading Commission’s “exclusive jurisdiction.” On Friday, Kalshi filed a motion seeking to temporarily block the DCP’s enforcement action.
Connecticut federal court judge Vernon Oliver ruled on Monday that the DCP must “refrain from taking enforcement action against Kalshi” while the court reviews the company’s request for a temporary injunction.
The order also sets deadlines for the case: the DCP must submit a response by Jan. 9, Kalshi must file additional support for its motion by Jan. 30, and oral arguments are scheduled for mid-February.
Kalshi faces regulatory challenges across multiple states
Kalshi, a federally regulated designated contract market under the CFTC, began offering nationwide event contracts in January, allowing users to place bets on outcomes ranging from sports to politics.
The platform has grown rapidly, setting a record $4.54 billion in monthly trading volume in November and attracting billions in investment. Earlier this month, Kalshi closed a $1 billion funding round at an $11 billion valuation.
Despite its federal regulation, Kalshi has faced pushback from several state regulators over whether its offerings fall under state gambling laws. In October, the company sued the New York State Gaming Commission after receiving a cease-and-desist order for allegedly providing unlicensed sports wagering.
In September, Massachusetts’ attorney general filed a lawsuit against Kalshi in state court, which the company sought to dismiss. This year, Kalshi has also taken legal action against regulators in New Jersey, Nevada, Maryland, and Ohio, accusing them of overstepping their authority.
