Federal court in Connecticut denies Kalshi’s preliminary injunction motion

A federal court in Connecticut has chosen to deny Kalshi’s motion for a preliminary injunction against the state’s Department of Consumer Protection, ruling that sports-event contracts cannot be defined as “swaps” under the Commodity Exchange Act. 

Kalshi originally filed a lawsuit against the Connecticut Department of Consumer Protection in December 2025 after receiving a cease-and-desist order from the regulator. 

The prediction markets operator had been seeking to prevent the Connecticut regulator from enforcing state gambling laws upon its operations, but witnessed a similar defeat as those recently seen in Michigan and Nevada. 

While the Commodity Futures Trading Commission (CFTC) has become involved in fellow state court cases which involve Kalshi, the CCFTC has yet to respond to the preliminary injunction denial in Connecticut. 

On August 6, Kalshi also suffered a significant legal setback in Utah after a federal judge ruled that the state has the authority to enforce its gambling laws against prediction market operators.

US District Judge Robert Shelby granted summary judgment in favor of the state, as his ruling not only denied Kalshi the pre-emptive relief it sought but also strengthened Utah's authority to regulate prediction markets.

In Michigan, the CFTC “exercised its authority to stay an emergency rule change proposed by Kalshi,” blocking the operator from cancelling trades in Michigan despite being ordered to cease such activity on June 29.

Kalshi moved to cancel trades in Michigan after the Ingham County Circuit Court granted Attorney General Dana Nessel a temporary restraining order against the operator, following her original enforcement action filed on March 4.

The temporary restraining order also called for Kalshi to implement geolocation services to ensure compliance with the enforcement action, but the operator has yet to do so given the CFTC’s interference.