Court Orders Connecticut to Hold off on Kalshi Cease-and-Desist Enforcement

• A judge has ordered Connecticut to hold off on enforcing a Kalshi cease-and-desist until at least February
• The Connecticut Department of Consumer Protection Gaming Division recently issued cease-and-desist orders to three prediction market platforms
• Kalshi responded one day later by filing a lawsuit against the state division

The have been ordered by a U.S. District Court to hold off on enforcing a cease-and-desist notice to Kalshi.

U.S. District Judge Vernon Oliver issued an order earlier this week ordering the division to refrain from enforcing the cease-and-desist notice it issued to Kalshi for its sports event contracts.

The court has ordered the state cease from enforcing the notice until it can resolve Kalshi’s request for preliminary injunction, which likely will not be resolved until February.

Kalshi Sues Connecticut

One day after receiving a cease-and-desist notice from the state, Kalshi levied a lawsuit in U.S. District Court against the Connecticut Department of Consumer Protection and director Gilman, requesting a preliminary and permanent injunction against the state.

“The Connecticut Department of Consumer Protection seeks to prevent Plaintiff KalshiEX LLC (“Kalshi”) from offering event contracts for trading on its federally regulated exchange. It does so by threatening Kalshi with imminent criminal and civil penalties for offering these contracts. Connecticut’s attempt to regulate Kalshi intrudes upon the federal regulatory framework that Congress established for regulating derivatives on designated exchanges,” counsel for Kalshi wrote in the lawsuit.

In his latest order, Judge Oliver ruled that Connecticut will have to hold off on the cease-and-desist notice pending the court’s decision on Kalshi’s request for a preliminary injunction.

The court entered the following briefing schedule, setting a date of Jan. 9, 2026, for the defendants reply to Kalshi’s preliminary injunction motion. Kalshi will have until Jan. 30, 2026, to reply and oral arguments will be set for Feb. 12, 2026.

It seems likely that Connecticut will be unable to enforce its cease-and-desist to Kalshi until mid-February at the very earliest.

Lawsuit Details

The lawsuit claims the Connecticut Department of Consumer Protection seeks to prohibit Kalshi from offering sports event contracts within the state, despite federal laws permitting the contracts and Kalshi being a federally-designated derivatives exchange.

“It offers consumers the chance to invest in many types of event contracts, including, as relevant here, sports-outcome contracts. These contracts are subject to extensive oversight by the CFTC, and—critically—they are lawful under federal law. Earlier this year, the CFTC allowed Kalshi’s sports-outcome contracts to take effect without review,” counsel noted in the lawsuit.

It’s a familiar strategy for Kalshi, which has levied several lawsuits against state gaming commissions and regulators when faced with a cease-and-desist notice. Kalshi recently filed a lawsuit against members of the New York State Gaming Commission just two days after the regulatory body sent a cease-and-desist letter to the prediction market company on Friday, Oct. 24.