Connecticut Sues Kalshi Over Sports Event Contracts

Connecticut has filed a lawsuit against prediction market platform Kalshi, seeking a court injunction to stop the company from offering sports-related event contracts that state officials classify as unlicensed sports wagering. The action, announced on August 27, 2026, escalates a months-long legal battle over whether these contracts are federally regulated derivatives or state-regulated gambling products.

Connecticut Attorney General William Tong stated that the state is seeking an injunction requiring Kalshi to cease offering what it identifies as unlicensed sports wagers. "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 said. Governor Ned Lamont added that Kalshi's prediction markets put the state's consumers and young people at serious risk. "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," Lamont said.

The dispute centers on whether contracts based on sports outcomes, traded on Kalshi's exchange, are federally regulated...