Connecticut sues Kalshi over unlicensed sports betting
Connecticut's Department of Consumer Protection sued Kalshi on Wednesday, alleging the CFTC-regulated prediction market offers unlicensed sports betting to state residents through its sports event contracts. The state seeks a court injunction to block Kalshi from offering online sports wagers. The DCP also ordered Kalshi and two unnamed platforms to take certain actions. Kalshi is separately suing Nevada's gaming regulator in federal court, opening another front in its broader legal fight against state authorities.
Washington's operational halt order already forced Kalshi to choose: build expensive state geofences or accept that open contracts may be voided. Connecticut adds a second state courtroom to the pile, multiplying legal bills and fragmenting the national-scale model Kalshi built under a single federal license. Traders now hold positions whose validity depends on state lines, not CFTC designation.
Each new lawsuit deepens the geographic uncertainty that already haunts rival platforms. The DCP's two unnamed targets suggest more enforcement is coming. Kalshi's Nevada federal suit is an offensive bid to flip the script, but the defensive docket is growing faster. Rivals Polymarket and Novig face identical exposure, yet Kalshi's profile makes it the state target of choice. A Connecticut loss would embolden attorneys general still watching from the sidelines.