Connecticut is suing the online prediction market Kalshi.
Kalshi allows users to trade on the outcome of nearly anything: typical events, like the Super Bowl, and niche things, like the Connecticut governor’s race. Users buy contracts priced between one cent and 99 cents, with the price being higher if the event is more likely to occur.
If a user buys a contract and it becomes true, the payout is $1.
State Attorney General William Tong said that’s gambling — making it subject to Connecticut consumer protection laws.
Only three entities are licensed to operate sports betting in the state: the Mashantucket Pequot Tribal Nation, the Mohegan Tribe, and the Connecticut Lottery Corporation. They partner with sites like FanDuel and DraftKings, which is why those sites are allowed in Connecticut.
Tong accused Kalshi of operating an unlicensed sports betting operation in Connecticut, and is seeking a court injunction to force them to stop.
“Sports event contracts are no different than sports betting and are not magically shielded by federal law from Connecticut’s commonsense consumer protection laws,” Tong said. “These laws exist for a reason — to protect minors, to prevent problem gambling, to ensure your money is safe and your personal information is protected. None of that is happening now on Kalshi, and we’re suing to put a stop to it.”
Kalshi is currently regulated by the Commodity Futures Trading Commission. Connecticut sent the company a cease-and-desist in December of 2025. In response, Kalshi sued; it was denied, and they have since appealed.
“These markets have been waging a coordinated campaign to convince people they are offering investments that are somehow safe when the reality is they are indistinguishable from sports wagering,” Connecticut Department of Consumer Protection Commissioner Bryan T. Cafferelli said. “They target minors and individuals who have purposefully opted out, don’t adhere to any of our technical standards designed to protect consumers’ money and personal information, and violate all of Connecticut’s gaming laws.”
The company’s head of litigation, Jovy Dedaj, called Wednesday’s lawsuit arbitrary and accused the state of being inconsistent in how they enforce consumer protection laws.
“Connecticut just filed this lawsuit to shut down Kalshi immediately, but they’re okay with other prediction markets operating there in the meantime,” Dedaj said on X. “This is the latest in a line of arbitrary and inconsistent enforcement by the states, which shows this has nothing to do with consumer protection.”