Attorney General William Tong, alongside Governor Ned Lamont and Consumer Protection Commissioner Bryan T. Cafferelli, is seeking an injunction to stop the exchange from operating within the state. The legal action escalates a conflict originating in December 2025, when the Department of Consumer Protection first ordered Kalshi to halt its sports markets. State leaders contend these contracts bypass essential safeguards, including age verification and technical oversight, which are mandatory for all other licensed sportsbooks in Connecticut.
Kalshi continues to challenge these enforcement efforts, asserting that its status as a federally regulated derivatives exchange grants it exclusive oversight by the Commodity Futures Trading Commission. The company argues that federal law preempts state gaming regulations. However, U.S. District Judge Vernon Oliver recently denied Kalshi’s request for a preliminary injunction that would have paused the state’s enforcement, prompting the firm to appeal the decision to the Second Circuit.
Jurisdictional friction persists as the CFTC has launched its own federal litigation against Connecticut, Illinois, and Arizona, claiming state interference with federal market authority. Similar legal battles are unfolding nationwide, with courts in New York and Washington recently siding against Kalshi’s preemption arguments. As the litigation proceeds, Connecticut officials insist that labeling a product as a financial derivative does not exempt it from established state gambling statutes.
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