Connecticut Sues to Block Kalshi’s Sports Event Contracts in State

_{Connecticut Attorney General William Tong believes Kalshi is offering illegal sports gambling in his state. (Photo: Operation 2023 / Alamy)}

The state of Connecticut announced Wednesday that it had sued prediction market Kalshi, seeking a court injunction to stop the company from offering what it called unlicensed sports wagering in the state.

Connecticut Attorney General William Tong announced the lawsuit, saying that Kalshi’s sports event contracts were simply gambling under another name.

Connecticut Files Lawsuit Following Federal Court Ruling

The dispute between Connecticut and Kalshi began in December 2025, when the state’s Department of Consumer Protection issued cease-and-desist notices to Kalshi and two other prediction markets over what the state deemed to be sports wagering.

Kalshi responded with a lawsuit of its own, seeking a temporary injunction to prevent Connecticut officials from taking any regulatory action against the site. However, a federal judge denied that motion earlier this month, opening the door for the state’s own lawsuit.

“These prediction markets put Connecticut consumers, young people, our student athletes, and those suffering from gambling addiction at serious risk,” Connecticut Gov. Ned Lamont said in a statement. “When we legalized sports wagering in 2021, the goal was to create a safe, responsibly regulated market for Connecticut consumers, not to open a free-for-all on sports betting.”

Regulated online sports betting and casino play are offered via DraftKings and FanDuel in partnership with the state’s tribal gaming partners, with branding tied to the Foxwoods and Mohegan Sun resorts. Fanatics also offers online sports betting in the state in partnership with the state lottery.

State and Federal Officials Clash Over Prediction Market Regulation

Like other prediction markets, Kalshi maintains that it offers financial instruments that are both fundamentally different than sports betting and under the exclusive jurisdiction of the federal Commodity Futures Trading Commission (CFTC). These same arguments have played out in court battles between prediction markets and state officials across the country.

In addition, Kalshi says that Connecticut is singling it out, even though other prediction markets are also operating in the state.

But Tong says the bottom line is that Kalshi is offering illegal gambling in Connecticut.

“Sports event contracts are no different than sports betting and are not magically shielded by federal law from Connecticut’s commonsense consumer protection laws,” Tong stated. “These laws exist for a reason—to protect minors, to prevent problem gambling, to ensure your money is safe and your personal information is protected. None of that is happening now on Kalshi, and we’re suing to put a stop to it.”

Connecticut is also one of three states that has been sued by the CFTC, which has argued that it has the exclusive right to regulate prediction markets.

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