Kalshi Pushes Back Against Connecticut’s Bid to Limit Operations

Kalshi has been pushing back against legal pressure. Despite a setback in Nevada, the platform has won another injunction in an order to continue operating in the Silver State, as a final decision in the case of whether the platform’s products fall under local gaming laws is reached.

At the same time, Kalshi is litigating with Connecticut, where the company is suing the Department of Consumer Protection Gaming Division, following up on a cease-and-desist letter issued against the platform in the first place.

Kalshi Gets Relief in Connecticut as Litigation Ongoing

So far, Kalshi has won a temporary injunction motion against the regulator, with the court agreeing that the Connecticut Consumer Protection Department now needs to file a response to Kalshi’s motion by January 9, 2026, and Kalshi would then submit a response by January 30.

What matters in this case is how the dialogue is framed. Legal expert Daniel Wallach has previously argued that Kalshi would seek to ensure that it is understood by the court that it offers a financial service and it is therefore under the remit of the Commodity Futures and Trading Commission, i.e., beholden to federal, non-state laws.

The idea is that Kalshi is a financial exchange and therefore the product offered is not “sports gambling” as stipulated by state gambling regulators.

There are many developments around this, with a specific class-action lawsuit now seeking to coach the terminology in the opposite direction, i.e., that prediction markets are “masquerading” as financial services to offer gambling products.

The Nevada Gaming Control Board (NGCB) recently suggested that prediction markets may not stop at sports betting and could introduce “prediction casinos” with serious consequences to the industry.

No Stopping Prediction Market Platforms Now?

At the same time, mainstream gambling companies have launched prediction markets, with Fanatics (surprising rivals) and FanDuel going live, and DraftKings also having skin in the game through Railbird, an exchange it acquired in October 2025.

Connecticut has reinforced a popular opinion in the meantime, arguing against the legality of the platforms and insisting that “only regulated operators” may offer sports betting products.

“Only licensed entities may offer sports wagering in the state of Connecticut. None of these entities possesses a license to offer wagering in our state, and even if they did, their contracts violate numerous other state laws and policies, including offering wagers to individuals under the age of 21,” Commissioner Bryan T. Cafferelli said.

In the meantime, Kalshi seems to be consolidating prediction markets’ mainstream status with the company launching back-to-back partnerships with CNN and CNBC.