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Kalshi has secured another loss in the space of a week in Connecticut. Just days after its bid for a preliminary injunction was denied, the company returned to court asking for emergency relief while it appealed.
Judge Vernon D. Oliver refused, stressing that the Commodity Futures Trading Commission cannot step in to undo the court’s reading of federal law. The dispute, like many around the country, centers on whether Kalshi’s sports‑event contracts fall under the Commodity Exchange Act.
Oliver had already ruled they do not, leaving Connecticut free to enforce its gambling laws. When the CFTC issued an emergency order telling Kalshi to keep operating, the judge pushed back, writing that “nothing in the CEA takes away statutory interpretation from the Courts, and as an administrative agency, the CFTC lacks the authority to dictate an order that conflicts with this Court’s decision.”
Court rules that Connecticut’s gambling laws complement, not conflict with, federal law
Judge Oliver reaffirmed that Kalshi’s sports-event contracts are not “swaps” under the Commodity Exchange Act and therefore fall outside the CFTC’s exclusive jurisdiction. This finding was central to his earlier denial of a preliminary injunction and remained unchanged in the latest order.
Kalshi argued that the CFTC’s emergency directive showed a clash between federal and state regimes, but the court disagreed, holding that Connecticut’s gambling laws complement federal law rather than conflict with it.
The judge also pointed to a similar ruling from the Southern District of New York, which likewise found that state law was not preempted by federal law in Kalshi’s case.
Judge disagrees with Kalshi’s irreparable harm and balance of equities claims
Kalshi claimed it faced irreparable harm if Connecticut resumed enforcement of its gambling laws, arguing that shutting down trading for state users would cause economic and reputational damage.
The court dismissed these claims, noting that monetary damages could serve as a remedy and that speculative fears of CFTC retaliation carried little weight.
Judge Oliver highlighted that Connecticut officials had voluntarily refrained from enforcement during earlier proceedings, but with the preliminary injunction denied, they were entitled to act. He cited the principle that “any time a State is enjoined by a court from effectuating statutes enacted by representatives of its people, it suffers a form of irreparable injury.”
The court also rejected Kalshi’s arguments that the balance of equities and public interest favored an injunction.
Kalshi repeated claims that Connecticut’s enforcement regime was unconstitutional and that an injunction would preserve the status quo, but Judge Oliver found no new reasoning to revisit his earlier analysis.
He concluded that the equities did not tip in Kalshi’s favor and that public interest supported allowing Connecticut to enforce its gambling laws.
