Kalshi loses court bid to block Connecticut gaming regulations

A U.S. District Court judge has denied a preliminary injunction requested by Kalshi, a prediction market platform, seeking to block Connecticut from regulating its products under state gaming laws.

Judge Vernon D. Oliver ruled that Kalshi’s sports-event contracts do not qualify as “swaps” under the Commodity Exchange Act (CEA). Because the contracts are not classified as swaps, the judge determined that the Commodity Futures Trading Commission (CFTC) does not have exclusive jurisdiction over them, meaning federal law does not preempt state regulation.

In his opinion, Judge Oliver noted that Kalshi’s contracts depend on the outcomes or discrete occurrences within a sporting event rather than the occurrence or nonoccurrence of the event itself. He stated that treating outcomes as separate events would depart from the ordinary meaning of the term. The ruling also noted that sports contracts represent approximately 80% to 90% of Kalshi’s listings and revenue.

In a related development, Coinbase Financial Markets also lost a companion motion based on the same reasoning.