Connecticut has sued prediction market operator KalshiEX LLC, alleging the company has illegally offered unlicensed sports betting to state residents since early 2025.
Attorney General William Tong filed the complaint Wednesday in Hartford Superior Court at the request of Consumer Protection Commissioner Bryan Cafferelli. Gov. Ned Lamont joined the announcement.
Kalshi had the case transferred to federal court the same day it was filed.
The lawsuit is the latest development in a broader legal fight over whether Kalshi’s sports event contracts constitute gambling subject to state regulation.
Connecticut’s two federally recognized tribes and a problem gambling advocacy group endorsed the state’s case Thursday, saying prediction markets should not be allowed to sidestep the rules that govern licensed casinos and sportsbooks.
The state’s lawsuit makes four claims and asks a judge to block Kalshi from offering the contracts under Connecticut’s gaming laws. It also alleges three violations of the Connecticut Unfair Trade Practices Act involving illegal wagering, underage gambling and deception.
Connecticut is seeking to force Kalshi to give up revenue from what the state says was unlicensed wagering, or alternatively the taxes and fees a licensed operator would have owed. The state also seeks restitution, civil penalties and attorneys’ fees.
New York-based Kalshi has offered sports contracts to Connecticut residents since January 2025 but has never applied for a state sports-wagering license, according to the complaint.
The state’s allegations focus in part on Kalshi’s minimum age of 18, compared with Connecticut’s minimum age of 21 for sports wagering.
The complaint alleges Kalshi paid minors to create promotional TikTok content and at one point used a 15-year-old video game streamer as an affiliate. It also alleges the company promoted a “Kalshi Ambassador Program” to Yale University and other college campuses in 2025.
Kalshi also has offered contracts tied to individual games involving UConn, Yale, Sacred Heart University, the University of New Haven, Fairfield University and Quinnipiac University, according to the complaint. Connecticut law does not permit betting on games involving those schools.
The state cites a February 2026 filing by Kalshi in federal court saying that 80% to 90% of the company’s offerings at the time were sports event contracts.
The lawsuit adds a new front to litigation involving Kalshi, Connecticut regulators and the federal Commodity Futures Trading Commission.
Kalshi sued Connecticut regulators in federal court in December after the Department of Consumer Protection ordered the company, Robinhood and Crypto.com to stop taking unlicensed sports wagers.
U.S. District Judge Vernon Oliver on Aug. 7 rejected Kalshi’s request to temporarily block Connecticut from taking enforcement action, finding that the company’s contracts are, “at bottom … sports wagers.” Kalshi is appealing that ruling to the 2nd U.S. Circuit Court of Appeals. Oliver denied a similar request from Coinbase Financial Markets Inc. in the same decision.
Separately, the Commodity Futures Trading Commission has sued Connecticut over the state’s efforts to regulate prediction-market contracts. That case also remains before Oliver.
In the new case, Tong’s office asked a state judge to immediately block Kalshi from offering the contracts without first giving the company an opportunity to respond. The state argued in its filing that Kalshi would likely move the case to federal court and that doing so could delay enforcement.
Superior Court Judge Lisa Kelly Morgan denied the emergency request, scheduled an in-person status conference for Sept. 17 and ordered the state to formally notify Kalshi of the lawsuit by Sept. 3.
Kalshi had the case moved to U.S. District Court in New Haven before the conference could occur. Hartford-based attorney Vanessa Roberts Avery of McCarter & English — the former U.S. attorney for the District of Connecticut — is representing Kalshi.
Jovy Dedaj, Kalshi’s head of litigation, said that Connecticut is seeking to shut down Kalshi while allowing other prediction-market operators to continue operating in the state.
Dedaj called the state’s approach “arbitrary and inconsistent enforcement” and said the dispute demonstrates the need for federal oversight.
The Mohegan Tribe, the Mashantucket Pequot Tribal Nation and the Connecticut Council on Problem Gambling issued a joint statement Thursday backing both the lawsuit and Oliver’s ruling.
Mohegan Tribe Chairman James Gessner Jr. said in the statement that the state’s gaming framework was built through negotiations between the state and sovereign tribal nations and is enforced by state and tribal regulators. He said emerging wagering products should not be permitted to bypass safety standards already in place.
Mashantucket Pequot Chairman Rodney Butler said innovation should not come at the expense of safeguards the state spent decades building, and commended Lamont, Tong and Cafferelli for defending the state’s regulatory authority.
The tribes operate Mohegan Sun and Foxwoods Resort Casino and, with the Connecticut Lottery Corp., hold the state’s only sports wagering licenses. Kalshi’s contracts compete directly with those operations.
Diana Goode, executive director of the Connecticut Council on Problem Gambling, said new technology or terminology should not mean fewer protections for consumers. Emerging products should carry age restrictions for people under 21, responsible gambling measures and access to help for people harmed by gambling, she said.
