Connecticut has asked a state court to order Kalshi to hand over all revenue it earned from Connecticut residents in a four-count complaint that alleges the platform allowed people under 21 to place sports wagers and briefly engaged a 15-year-old video game streamer as a promotional affiliate.
The verified complaint was filed in Hartford Superior Court on August 26 with a return date of September 15. It was sworn on August 25 by Jeffrey Hakala, supervising special investigator for gaming at the Department of Consumer Protection.
What the State Is Asking For
The press announcement described the action as seeking an injunction. The complaint asks for considerably more.
Count One seeks temporary and permanent injunctions under the state’s gaming statute, plus disgorgement of all revenue Kalshi received from unlicensed sports wagering in Connecticut—or, in the alternative, disgorgement equal to the taxes, fees, and contributions a licensee would have owed.
Counts Two, Three, and Four are brought under the Connecticut Unfair Trade Practices Act, covering unfairness through illegal sports wagering, unfairness through underage gambling, and deception. Together they seek restitution, civil penalties for each willful violation, disgorgement of all revenues and gains, and attorneys’ fees.
For context on what the state says it is owed, licensed operators pay 13.75% of gross gaming revenue to Connecticut, of which 2% funds youth sports organizations in distressed municipalities and contributes $500,000 annually to gambling treatment programs.
The scope is comparable to New York’s July petition, which sought to shut Kalshi down in the state and recover fines worth three times its profits.
The Underage Allegations
Count Three is devoted to minors, defined under Connecticut law as anyone under 21.
The complaint alleges Kalshi makes its platform available to anyone 18 or older, meaning many high school students may open accounts and wager on sports. It alleges minors have said they were paid by Kalshi to create promotional content, including on TikTok, and that Kalshi briefly engaged a 15-year-old video game streamer as an affiliate to promote the platform on X.
It further alleges Kalshi ran a “Kalshi Ambassador Program” promoted on X in 2025 that targeted Yale University, among other colleges, inviting Connecticut college students to place sports wagers.
Separately, the state says Kalshi offered contracts on single games played by Connecticut college teams, including UConn, Yale, Sacred Heart, the University of New Haven, Fairfield, and Quinnipiac—teams specifically excluded from the definition of sporting events on which wagering is permitted.
Ten Jurisdictions and a Circuit Court
The complaint’s account of the litigation record differs sharply from the picture Kalshi has presented in its own filings.
US District Judge Vernon Oliver denied Kalshi’s motion for a preliminary injunction on August 7 in KalshiEX LLC v. Cafferelli. The complaint quotes the ruling’s conclusion that the contracts are, at bottom, sports wagers and are subject to state law.
Connecticut says that decision joined courts in Maryland, Nevada, Massachusetts, Washington, Michigan, New York, Ohio, Arizona, and Utah, together with the Sixth Circuit Court of Appeals, in holding that Kalshi’s sports wagers are not swaps or are not subject to exclusive federal jurisdiction. The complaint cites each by docket number.
That list includes Arizona, which Kalshi had previously cited among jurisdictions where it secured favorable relief when it sued Illinois in June.
The pattern also tracks the platform’s recent federal setbacks. An Ohio court ruled against Kalshi, prompting the CFTC to file an amicus brief on its behalf, and on August 4 a federal judge rejected the CFTC’s emergency bid to block New York’s case.
Kalshi’s Numbers, in the State’s Telling
The complaint cites Kalshi’s own figures against it. As of May 7, 2026, Kalshi claimed a $22 billion valuation and $178 billion in total trading volume, up from an annualized $5.5 billion in April 2025.
It also cites Kalshi’s own report to the federal court that between 80% and 90% of its offerings were sports event contracts as of February 2026—a figure the state uses to argue the platform is a sportsbook rather than a derivatives exchange incidentally listing sports.
The complaint alleges Kalshi marketed itself as “the first nationwide legal sports betting platform” and as legal in all 50 states, characterized its contracts as investments, and offered parlay-style “combos” and contracts on whether an announcer would say a particular phrase.
The Federal Front
Kalshi has argued since 2020 that its status as a CFTC-registered designated contract market places its contracts under exclusive federal oversight. It has pressed that theory offensively as well, suing Illinois in June over SB 3019 and suing Minnesota in May over that state’s outright ban.
The CFTC has taken the same position institutionally, bringing preemption suits against nine states, including Connecticut, which has moved to dismiss. In July, 44 state attorneys general told the agency in a comment letter that it lacks authority over sports prediction markets.
Kalshi is also facing a suit from FlightAware filed on August 10 over the use of flight data in cancellation contracts, and the CFTC fined former congressman George Santos in August over manipulation of a Kalshi market.
Kalshi’s Response
Jovy Dedaj said in a post on X that Connecticut had filed the suit to shut Kalshi down immediately while permitting other prediction markets to continue operating in the state, describing it as the latest instance of arbitrary and inconsistent enforcement that demonstrated the case had nothing to do with consumer protection. She said that if it did, states would seek the same relief across the board and that the unequal treatment was precisely why federal oversight is necessary.
Connecticut’s December 2025 cease-and-desist order covered Kalshi and two other prediction market providers. The complaint does not name them or say whether they complied.
The Crypto Times has contacted Kalshi for further comment and asked the Attorney General’s office about the status of the other two recipients; this report will be updated with any response.
