Kalshi’s US Legal Squeeze Tightens as Connecticut Court Rebuffs CFTC Authority
A Connecticut judge denied Kalshi's injunction bid, questioning CFTC power, as new geofencing deadlines and a White House meeting loom this week.
This article was produced with AI assistance and edited by the ON360 newsroom.
A Connecticut federal judge has dealt another legal blow to prediction market operator Kalshi, ruling that the Commodity Futures Trading Commission (CFTC) does not have authority to override a court’s interpretation of federal law. The decision, reported by Gambling Insider, deepens a widening legal confrontation over whether prediction markets offering sports and election-related contracts should be treated as regulated derivatives or as gambling products subject to state oversight.
Connecticut ruling raises the stakes for the CFTC
U.S. District Judge Vernon D. Oliver denied Kalshi’s request for an injunction pending appeal, rejecting the company’s attempt to rely on a CFTC “emergency order” issued Aug. 11 in a separate New York case. Oliver found that the regulator cannot issue directives that conflict with a court’s reading of federal law, according to Gambling Insider.
The ruling puts renewed pressure on the CFTC, which has repeatedly intervened to shield prediction markets from state-level restrictions. Attention now turns to whether the agency responds with new filings or actions, and whether New York courts cite the Connecticut decision as additional authority in that state’s ongoing dispute with Kalshi.
Geofencing deadlines pile up as Washington weighs in
Kalshi has already rolled out GeoComply geofencing restrictions in Michigan and Nevada, though the Nevada deployment triggered a fresh dispute over how state investigators accessed the platform, Gambling Insider reported. Washington state is next, with Kalshi facing an Aug. 19 deadline for initial geofencing and a Sept. 2 deadline to deploy full GeoComply restrictions.
The legal and regulatory drama is unfolding alongside high-level talks in Washington, D.C. President Donald Trump was expected to meet crypto and prediction market executives at the White House, with Coinbase, Robinhood, Kalshi and Polymarket represented alongside CFTC Chairman Michael Selig, according to Politico as cited by Gambling Insider. The CFTC’s newly formed Innovation Advisory Committee was also set to hold its inaugural meeting, with prediction markets, cryptocurrency and artificial intelligence on the agenda.
Commercial activity has kept pace with the legal battles. CFTC product filings have accelerated over the past two weeks, with DraftKings, Underdog, Gemini, Novig and ProphetX self-certifying new football-related contracts ahead of the NFL and college football seasons.
World Cup lifts July sportsbook handle, LuckyLand winds down
Elsewhere in the U.S. market, July sports betting figures point to a strong lingering effect from the FIFA World Cup. New York’s mobile sportsbook revenue jumped 37.8% year-over-year to a July record of $214.4 million, while Maryland and Delaware posted handle growth above 30% and New Jersey sportsbook revenue rose nearly 30%, per Gambling Insider. The Premier League’s 2026-27 season kicks off this week, offering another test of whether soccer-driven betting engagement can carry through into the fall sports calendar.
In the sweepstakes casino sector, VGW’s long-running LuckyLand Slots brand is entering its final stretch. Gold Coin purchases stopped Aug. 3, gameplay is set to end Aug. 24, and players have until Sept. 14 to complete eligible redemptions before the platform closes for good, as the U.S. sweepstakes casino industry continues to consolidate.
For Canadian players and operators watching from Ontario’s regulated iGaming market, the U.S. turmoil underscores a key distinction: licensed sportsbooks and casinos operating under AGCO and iGaming Ontario rules must offer responsible-gambling tools such as deposit limits and self-exclusion, protections that remain contested or absent in the fast-moving, largely unregulated U.S. prediction market space.
Related: Kalshi’s US Legal Woes Deepen as CFTC Clashes With New York, Courts Side Against It
Related: Connecticut Judge Rules Kalshi Sports Contracts Are Gambling, Not Swaps
Related: CFTC Tells Prediction Markets to Ditch Sportsbook-Style Odds Displays
Related: DraftKings’ Prediction Market Arm Files Nine Football Contracts With CFTC