Kalshi denied temporary shield from Connecticut gambling enforcement during federal appeal

The U.S. Court of Appeals for the Second Circuit has denied Kalshi's request for temporary protection from Connecticut's gambling enforcement while its appeal remains pending. The court denied Kalshi's motion for a temporary injunction against Connecticut, stating that the case will be reviewed by a three-judge panel and given until August 24th for the state to file a response.

This decision follows Kalshi's emergency request on August 17th, and a previous refusal by U.S. District Judge Vernon D. Oliver to halt enforcement. The Second Circuit has left Kalshi's larger injunction request unresolved, sending it to the three-judge panel along with another motion in the case. Kalshi's lawyer argues that the Commodity Futures Trading Commission has exclusive authority over its contracts under the Commodity Exchange Act.

However, the district court denied Kalshi a preliminary injunction, and the court's intervention is necessary to prevent Kalshi from facing irreparable harms under preempted state law before the court can weigh in. Connecticut officials have been given permission to file a full response, with the opportunity to file by August 24th.