On August 10, 2026, a Connecticut judge denied Kalshi’s bid for a preliminary injunction against state regulators, ruling that the operator’s sports event contracts don’t fall under the Commodity Exchange Act (CEA).
The decision was made by U.S. District Judge Vernon Oliver, who explained that the sports contracts aren’t classified as swaps under federal commodities law and subsequently cannot preempt state regulations.
Judge Oliver wrote:
“Kalshi characterizes its sports‑related event contracts in various ways, but at bottom, they are sports wagers. Kalshi’s sports-event contracts fail to satisfy this portion of the statutory definition of a swap because they do not depend on whether an underlying sporting event occurs, fails to occur, or occurs to a particular extent. Treating those outcomes as separate ‘events’ would depart from the ordinary meaning of the term.”
The judge cited the CEA’s language and noted that Congress has directly given preemption to state gambling laws in specific cases, arguing that in Kalshi’s situation it would have explicitly applied the rule. At the same time, the court dismissed the prediction market operator’s claims that Connecticut law would conflict with the CFTC rules that require impartial market access.
Additionally, Judge Oliver ruled against a similar motion filed by Coinbase, granting another win to state gambling laws.
