Connecticut Sues Kalshi, Wants Its State Revenue Back

Connecticut Attorney General William Tong sued Kalshi on August 26, 2026, asking a Hartford judge to shut its sports contracts out of the state and to make it hand back every dollar it has earned there. Kalshi removed the case to federal court the same day, and on September 17 a judge froze every deadline in it, including Kalshi's deadline to respond at all.

We read the verified complaint and the stipulation behind the freeze, both off the federal docket, and checked the clerk's text on every entry either one refers to. The complaint is 25 pages and says a good deal more than the cease-and-desist letters Connecticut has sent prediction markets. It also gets one of its own dates wrong, which we set out below.

The case is State of Connecticut v. KalshiEX LLC, filed in Superior Court at Hartford as HHD-CV26-6230345-S and removed to the District of Connecticut as No. 3:26-cv-01382. Kalshi has not answered it and, under the September 17 order, does not have to until the court decides where the case belongs.

Connecticut did not only file a complaint. The removal papers list, as exhibits, a Motion for Temporary Injunction, a proposed ex parte temporary injunction and a state-court Order for Hearing and Show Cause, all filed with the complaint on August 26. So the state asked a Superior Court judge to stop Kalshi immediately and got a hearing ordered. No injunction has issued, and nothing on the federal docket rules on that motion.

What is Connecticut actually asking for?

Four counts, and the money one is the one to read. Count One seeks a temporary and permanent injunction under General Statutes section 12-861(c) barring Kalshi from offering any sports wagering service in Connecticut without a licence. It also asks for "disgorgement of all revenues received by Kalshi through its unlawful operation of a sports wagering service" - or, in the alternative, disgorgement of every tax, fee and contribution Kalshi "were it a licensee, would have been obligated to remit."

The prayer for relief adds restitution, civil penalties for each willful violation, attorneys' fees and a second disgorgement demand under the consumer-protection statute.

The underage count is the one with the sharpest factual edge. Connecticut defines a minor as anyone under 21 for these purposes, citing C.G.S. section 12-863(a)(1). The complaint alleges Kalshi "makes its platform available to anyone 18 years old or older" and that this "means that many high school students may make Kalshi accounts and wager on sports." It is the same 18-versus-21 gap Missouri's attorney general put in five of six cease-and-desist letters three weeks later.

Count Four alleges Kalshi falsely claimed its wagers are "legal" in all states, and that it has characterised contracts to consumers as "investments" using terms like "trading", "financial strategy", "price fluctuations" and "market risk", "falsely implying that wagers are akin to traditional saving or investment vehicles."

Which judge is hearing the Connecticut Kalshi case?

District Judge Vernon D. Oliver, who has already ruled against Kalshi once, and that is what makes the removal matter more than it sounds. The complaint's own account is that Connecticut's Department of Consumer Protection sent cease-and-desist letters in December 2025, Kalshi responded by suing state officials in federal court, and that suit failed: the complaint says the District of Connecticut "roundly rejected Kalshi's legal theory" and denied it a preliminary injunction, quoting the court's conclusion that "at bottom, they are sports wagers."

That decision was Judge Oliver's, and the new case has ended up in front of him too - but not by the draw. When Kalshi removed on August 26 the clerk assigned the case to District Judge Sarah F. Russell. Five days later, on August 31, Judge Russell signed an order of transfer reassigning it to Judge Oliver "for all further proceedings", which is why the docket now reads 3:26-cv-01382-VDO. Kalshi's removal bought it a federal forum and, within five days, the same judge who had already rejected its central argument.

We reported that argument being rejected when the same judge denied Kalshi and Coinbase injunctions in August, along with the follow-up in which Judge Oliver held a CFTC emergency order could not shield Kalshi from Connecticut law, and the Second Circuit later refused to pause the case while Kalshi appealed.

Did Connecticut get the date of its own key ruling wrong?

Yes, by three days, and we can show it. The complaint twice puts that preliminary-injunction denial on August 7, 2026, citing it as Cafferelli, 2026 U.S. Dist. LEXIS 178500 (D. Conn. Aug. 7, 2026). The denial is entry 94 on the KalshiEX LLC v. Cafferelli docket, No. 3:25-cv-02016, and the clerk's text reads "ORDER denying 30 Motion for Preliminary Injunction ... Signed by Judge Vernon D. Oliver on 8/10/2026." It was entered the same day, August 10, and there is no entry of any kind on that docket between July 20 and August 10. Our August reporting and Missouri's cease-and-desist letters both said August 10, and August 10 is right. The error is the State's, it is three days, and it changes nothing about the case. We are flagging it because a reader who searches the complaint's date will not find the ruling, and because the miscited decision is the strongest authority Connecticut has.

What did the September 17 order freeze?

Connecticut moved to remand the case back to state court on September 8, and that motion is what everything now waits on. The September 17 order stopped the clock on all of it. The stipulation at entry 38, signed by Assistant Attorneys General Joseph Gasser and Michael Nunes for the state and by Neal Katyal and a Milbank team for Kalshi, asked the court to stay every pending deadline "until the Court adjudicates the State's pending motion to remand." That document is a proposal and carries no judge's signature. The order is the next entry: entry 39, the same day, reads "The proposed stipulation is So Ordered. All pending deadlines in this action, including Kalshi's deadline to respond to the Complaint, the Rule 26(f) conference, and the deadline to submit the Rule 26(f) report, are stayed until the Court adjudicates the issue of remand."

Three deadlines went on hold:

• Kalshi's October 27, 2026 deadline to respond to the complaint, which it had earned by waiving service on September 4
• The September 25, 2026 Rule 26(f) conference
• The October 9, 2026 deadline for the Rule 26(f) report

If the case stays in federal court, Kalshi gets 30 days from the remand ruling to respond, the parties confer within 30 days, and the report follows 14 days after that. The parties' stated reason is that the remand motion "may determine whether this Court has jurisdiction over the action."

What does this mean for a Connecticut player today?

Nothing has been switched off. There is no injunction against Kalshi in Connecticut, the state's request for a temporary one has not been ruled on, and the case will not reach the merits until the remand fight ends. If you are trading on Kalshi in Connecticut, you are doing so while your state's attorney general argues in court that the product is illegal there, which is a different risk from a product that has already been ordered out.

The sweepstakes side of the state is a separate matter and further along: Connecticut has been a banned state since Public Act 25-112 took effect on October 1, 2025, so the question there is not whether a court will act but whether brands honour a ban that already exists. Some do not. Zula Casino and Sportzino both take Connecticut sign-ups, and their own sweeps rules bar Connecticut residents from redeeming at all. Nothing in this case changes that either way.

Connecticut is now fighting on two prediction-market fronts at once. It ordered nine operators out by letter on September 10, and one of them, Underdog, turned round and sued the attorney general days later.

What are the next dates in the Connecticut Kalshi case?

Two are worth putting in a calendar. September 29 is when Kalshi must oppose the remand motion, and the ruling on remand is the event that restarts everything else, including its deadline to answer the allegations above. Until then this docket will not move.

Sources & documents

• Verified Complaint, State of Connecticut v. KalshiEX LLC, HHD-CV26-6230345-S (Conn. Super. Ct., Hartford, Aug. 26, 2026) - 25 pages, filed as Exhibit A to the notice of removal; the source of the four counts, the prayer for relief, the under-21 allegations and every quotation attributed to the state
• Stipulation to Vacate Case Schedule, entry 38, No. 3:26-cv-01382 (D. Conn. Sept. 17, 2026) - 5 pages; the parties' proposal, and the source of every date in the freeze, the waiver-of-service timeline and the post-remand schedule. It is unsigned by the court
• Docket, State of Connecticut v. KalshiEX LLC - read September 20, 2026. Entry 39 is the order so-ordering that stipulation, quoted above from the clerk's text, and the last filing on the case. Also the source of the state case number, the August 26 removal exhibits, the August 26 assignment to Judge Russell, the August 31 order of transfer to Judge Oliver, and the September 8 remand motion with responses due September 29
• Docket, KalshiEX LLC v. Cafferelli, No. 3:25-cv-02016 (D. Conn.) - read September 20, 2026; entry 94 is the preliminary-injunction denial, signed and entered August 10, 2026, which is how we date the ruling the complaint puts on August 7

Everything above attributed to Connecticut is an allegation in a complaint that has not been tested in court. Kalshi has not been found to have violated Connecticut law, has not yet responded to the complaint, and we found no statement from the company on this suit to report.

21+ only. If gambling stops being fun, call or text 1-800-GAMBLER. Responsible gaming resources.