Connecticut judge rejects Kalshi bid to pause gambling enforcement during appeal

A federal judge in Connecticut has denied Kalshi's emergency bid to halt gambling enforcement while the company appeals the case. U.S. District Judge Vernon D. Oliver dismissed Kalshi's request for an injunction during the appeal on August 15, as well as a backup request for temporary administrative relief. The decision came after Oliver denied a preliminary injunction against Connecticut officials and the Department of Consumer Protection on August 10.

Oliver ruled that Kalshi's sports-event contracts do not qualify as "swaps" under the Commodity Exchange Act, placing them outside the Commodity Futures Trading Commission's exclusive jurisdiction. He also found that federal law does not supersede Connecticut's authority to regulate sports wagering. Kalshi faces a more challenging hurdle during the appeal, as it now needs a stronger case for likely success than it did for preliminary relief.

Several arguments questioned Oliver's conclusions about swaps and federal preemption, with Kalshi claiming the Second Circuit could reach a different outcome. However, Oliver stated that the possibility for reversal alone does not warrant extraordinary injunctive relief.