Kalshi Wins Temporary Pause Against Connecticut Gambling Order
A federal choose has handed prediction markets platform Kalshi a short lived protect from enforcement after Connecticut regulators accused the corporate of operating unlicensed on-line playing.
Key Takeaways:
- A federal choose quickly blocked Connecticut from imposing its playing order towards Kalshi.
- Kalshi argues its occasion contracts fall underneath the CFTC’s unique jurisdiction, not state playing legal guidelines.
- The Connecticut dispute is considered one of a number of state-level battles Kalshi is preventing as regulators problem its nationwide enlargement.
The ruling pauses state action because the authorized battle over Kalshi’s standing strikes into early 2026.
Connecticut’s Department of Consumer Protection (DCP) issued cease-and-desist notices on Dec. 2 to Kalshi, Robinhood, and Crypto.com, alleging they had been providing unlicensed sports activities wagering by “on-line sports activities occasion contracts.”
Judge Halts Connecticut Action as Kalshi Claims Federal Oversight
A day later, Kalshi sued the company, arguing that its occasion contracts fall squarely underneath federal derivatives legislation and that the Commodity Futures Trading Commission (CFTC), not particular person states, has “unique jurisdiction” over its platform.
On Monday, Judge Vernon Oliver ordered the DCP to chorus from taking motion whereas the courtroom opinions Kalshi’s request for momentary reduction.
Under the schedule set by the courtroom, the DCP should reply by Jan. 9, Kalshi will submit further arguments by Jan. 30, and oral arguments are anticipated in mid-February.
Kalshi, designated by the CFTC as a federally regulated contract market, started providing event-based contracts nationwide earlier this 12 months, together with markets tied to sports activities, climate, and political outcomes.
However, the platform’s enlargement has triggered a wave of state-level challenges. Regulators in a number of states argue that Kalshi’s contracts resemble sports activities bets and fall underneath playing legal guidelines.
Kalshi says its merchandise are federally regulated monetary devices, not wagers, and that state crackdowns violate the Commodity Exchange Act.
Connecticut is the most recent in a string of regulatory battles. In October, Kalshi sued the New York State Gaming Commission after it issued the same cease-and-desist order.
Massachusetts’ legal professional basic took the corporate to courtroom in September, and Kalshi has filed fits this 12 months towards regulators in New Jersey, Nevada, Maryland, and Ohio, accusing every of overstepping their authority.
Kalshi Partners with CNN After $1B Funding Round
As reported, Kalshi has secured a major media breakthrough after signing a partnership with CNN, making the corporate the community’s official prediction markets accomplice whereas closing a $1 billion funding spherical at an $11 billion valuation.
Under the settlement, Kalshi’s real-time market information can be used inside CNN’s newsroom to help reporting on politics, economics, and main cultural occasions.
The funding follows a surge in exercise throughout prediction platforms. According to Token Terminal information cited by the corporate, Kalshi posted document buying and selling quantity of $4.54 billion in November, beating October’s $4.49 billion.
Kalshi stated weekly volumes at the moment are exceeding $1 billion, representing development of greater than 1,000% since 2024.
Its closest competitor, Polymarket, additionally recorded a powerful November, hitting a month-to-month complete of $3.76 billion after crossing $3 billion in October.
Meanwhile, Mike Novogratz’s Galaxy Digital is in talks with Polymarket and Kalshi about turning into a liquidity supplier, as on-chain betting on real-world occasions attracts extra consideration from each retail merchants and Wall Street.
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