U.S. District Judge Vernon D. Oliver has denied a preliminary injunction filed by prediction market platform Kalshi in Connecticut federal court.
The ruling determines that the company’s sports-event contracts do not qualify as swaps under federal commodities law and remain subject to state gambling regulations.
Statutory Definition and Market Classification
Judge Oliver’s decision centers on the Commodity Exchange Act’s definition of a swap. The court noted that legislative language treats an event as a binary occurrence rather than a collection of possible outcomes. Because Kalshi’s instruments track specific sporting results and individual in-game moments, they fall outside the statutory scope. "Kalshi characterises its sports-related event contracts in various ways, but at bottom, they are sports wagers," Oliver wrote, citing a previous Nevada ruling against the company. The judge also observed that these contracts lack the financial, economic, or commercial consequences required by the CEA.The ruling separately addresses Kalshi’s federal pre-emption claim. Oliver stated that even if the contracts met the swap classification, the CEA would not override Connecticut’s gambling statutes. The court referenced specific CEA provisions on gaming and state-law pre-emption, concluding that Congress did not intend to displace state oversight in this sector.
Additionally, the judge dismissed the argument that state requirements clash with CFTC impartial market access rules, noting that federal regulations do not mandate nationwide contract availability.
The Connecticut decision aligns with a series of recent rulings that have challenged Kalshi’s primary legal position, though federal courts have issued varying verdicts in comparable cases. The court ultimately determined that state gambling statutes complement federal law rather than conflict with it.