The prediction market company Kalshi has sued the Connecticut Department of Consumer Protection over a cease-and-desist order that was issued on 3 December.
“The Connecticut Department of Consumer Protection seeks to prevent Plaintiff KalshiEX LLC (“Kalshi”) from offering event contracts for trading on its federally regulated exchange,” the Kalshi complaint reads.
It continues to state that the action challenges the state of Connecticut’s “intrusion into the federal government’s exclusive authority to regulate derivatives trading on exchanges” overseen by the CFTC.
JUST IN: Kalshi has sued the Connecticut Department of Consumer Protection in federal court alleging that state enforcement over sports event contracts is preempted by the CEA and it "intends to imminently seek an emergency temporary restraining order and preliminary injunction." pic.twitter.com/BdcoiPXP1a
— Daniel Wallach (@WALLACHLEGAL) December 3, 2025
Alongside Kalshi, the Connecticut department also sent letters to Robinhood and Crypto.com, with these cease-and-desist notices being for allegedly conducting unlicensed online gambling, specifically sports wagering.
Legal back-and-forth with Kalshi and Connecticut Department of Consumer Protection may now begin
“Only licensed entities may offer sports wagering in the state of Connecticut,” said DCP Commissioner Bryan T. Cafferelli in a statement on December 3. “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.”
These two actions, which have both taken place this week, could see a back-and-forth between Kalshi and the Connecticut Department of Consumer Protection now take place due to the proceedings.
The state isn’t the first to be asking questions about prediction markets in general, with this form of gambling proving to be a controversial subject. Kalshi has already been embroiled in legal cases in Ohio and Nevada on similar grounds, while Robinhood was forced to pause operations in Nevada, and Crypto.com is facing similar obstacles in Nevada, too.
While these platforms have faced pushback from some regulators, the prediction market continues to open up further as major sportsbooks like FanDuel and Fanatics are entering. Just this week, Fanatics Markets launched in 10 states, with more to come.
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