Connecticut the Latest State to go to Battle With Prediction Markets, Kalshi

Written by :

C Costigan

Published on :

4 December, 2025

Connecticut is the latest US state to declare war on prediction markets.

The Connecticut Department of Consumer Protection’s (DCP) Gaming Division, which regulates sports and casino gambling in the state, this week sent out desist letters to Robinhood, Kalshi and Crypto.com. The regulatory body claims that all three are in violation of state gambling laws by offering their sports-related event contracts.

“Only licensed entities may offer sports wagering in the state of Connecticut,” said DCP Commissioner Bryan T. Cafferelli said in a press release from the regulator about the cease and desist letters, which were sent out on December 2. “None of these entities possess 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.”

Kalshi has vowed to operate in all 50 states. They responded to the cease and desist letter the following day with a lawsuit seeking an injunction barring the enforcement of the cease and desist the very next day.

“Setting aside Kalshi’s sports-event contracts, DCP’s cease-and-desist letter suggested that all of Kalshi’s event contracts are unlawful because Connecticut law ‘prohibits gambling,’ defined as ‘risking any money, credit, deposit or other thing of value for gain contingent in whole or in part upon lot, chance or the operation of a gambling device,’ and Kalshi’s actions do not ‘fall within any of the excepted activities to the prohibition on gambling,'” the filing argued.

From SBC:

As it has argued in several other states, Kalshi’s suit says that the Commodity Exchange Act (CEA) preempts state gaming laws and the regulation of all of its even contracts is the sole jurisdiction of the Commodity Futures Trading Commission (CFTC).
It also put forth an argument it is making in its court battle against the Massachusetts Gaming Commission (MGC) that suggests what the regulator is asking for would offline every contract being offered on Kalshi’s site.