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Kalshi loses another bid for a preliminary injunction in case against Connecticut

Legal Writer

Publish Date: Aug 11, 2026

Fact checked by: Matt Moreno

Key Points

Federal judge denied Coinbase’s and Kalshi’s and request for a preliminary injunction against Connecticut officials on Monday
Decision means law enforcement in Connecticut can move forward with gaming law actions
Lawsuit came in reaction to cease-and-desist orders from Connecticut gambling regulators

Another United States federal court has ruled against giving prediction market exchange operators legal cover to offer sports event contracts, this time denying the request pertaining to Connecticut officials’ attempts to enforce the state’s gambling laws. The ruling means that law enforcement and gambling regulators can move forward with the cease-and-desist demands that they sent to multiple exchange operators at the end of 2025.

As the number of unfavorable rulings regarding sports event contracts grows, the precedent for similar decisions in the future strengthens. That is a snowball effect that could cause companies like Coinbase and Kalshi to steer their products away from sports event contracts.

(Photo by Samuel Boivin/NurPhoto via Getty Images)

Federal judge says sports event contracts don’t qualify as “swaps”

U.S. District Judge Vernon D. Oliver published the decision on the joint request for injunctive relief from Coinbase and Kalshi on Aug. 10. In the denial, Oliver wrote that “Kalshi has not demonstrated that it is likely to succeed on the merits” of its case against Connecticut officials like Bryan T. Cafferelli, the commissioner of the Connecticut Consumer Department of Protection (CCDP).

Oliver added that “the court largely agrees” with Cafferelli (the lead defendant) that sports event contracts do not fit the definition of “swaps” under federal law. Oliver also stated that “Kalshi’s preemption arguments…fail” because “Connecticut’s gambling laws complement rather than conflict with federal law.”

Coinbase and Kalshi have already communicated their intent to appeal Oliver’s decision to the U.S. Second Circuit Court of Appeals. However, the ruling adds to the growing body of unfavorable opinions that prediction market exchange operators are navigating.

Prediction market exchange operators facing increasingly difficult judiciary

Oliver’s decision follows several other federal judges reaching similar conclusions on whether federal law preempts state gambling laws and the nature of sports event contracts. The bigger issue for exchange operators is that the whole is greater than the sum of the parts in this context.

Oliver pointed to several preceding rulings from other federal courts on this issue as support for his reading of the statutes. In turn, judges facing similar questions in the future can now add Oliver’s order to the amount of case law supporting the same conclusions.

That snowball effect is more of a long-term concern for Coinbase, Kalshi, and others. Those companies have more immediate issues in Connecticut in light of Oliver’s opinion.

Will Connecticut officials move forward with enforcing cease-and-desist orders?

Coinbase’s and Kalshi’s lawsuits stemmed from December 2025 cease-and-desist letters that the CCDP sent to those companies plus Crypto.com and Robinhood. The orders concerned sports event contracts on the platforms and deemed the recipients in violation of the state’s gambling laws.

Oliver’s decision represents a victory for the CCDP, albeit a limited and potentially temporary one. For that reason, the CCDP may wait until the Second Circuit rules on the Coinbase/Kalshi appeal to take any further action.

Additionally, the CCDP may wait until the district court has ruled on the merits of the case or for a potential appeal of that ruling. Technically, the CCDP has clearance to take further enforcement actions now, though.

If the CCDP is waiting for the legal picture to become clearer across the rest of the country, that clarification is ongoing. Oliver’s decision is another example of how that clarification is trending away from prediction market exchanges’ ability to offer sports event contracts.

On the hunt for more of the latest news and updates? Head over to the Ballislife Play page.

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