Kalshi Supreme Court case and Connecticut's crackdown

New Jersey has asked the US Supreme Court to settle who regulates sports event contracts, putting the Kalshi Supreme Court case at the centre of American betting law. The petition, filed on 2 September 2026, came eight days before Connecticut announced orders telling nine prediction market platforms to stop offering sports contracts to its residents.

What is the Kalshi Supreme Court case about?

Kalshi says its sports contracts are financial contracts under federal commodities law, overseen by the Commodity Futures Trading Commission (CFTC). New Jersey says they are sports bets that states can license and regulate.

Two federal appeals courts have given opposite answers. In April, the Third Circuit upheld, by a 2-1 vote, a temporary block on New Jersey enforcing its gambling laws against Kalshi. A federal judge first granted that block in April 2025, and the appeals court found Kalshi was likely to show federal law takes priority.

On 28 August, the Ninth Circuit went the other way in Kalshi's case against Nevada regulators. A unanimous three-judge panel said federal law likely does not override Nevada's gaming rules, because the contracts are sports bets rather than swaps, according to CoinDesk's report on the Ninth Circuit ruling. A CFTC spokesman said the split called for the Supreme Court to resolve it.

Kalshi has since asked the full Ninth Circuit to rehear the case, and Robinhood and Crypto.com, both parties to the same consolidated decision, have asked the Supreme Court to review it. On 8 September the Tenth Circuit also refused Kalshi's emergency request to stop Utah enforcing its gambling laws while its appeal continues.

What does New Jersey's petition ask?

New Jersey Attorney General Jennifer Davenport's office asked the justices to decide whether federal law stops states from regulating Kalshi's sports contracts. NPR's report, published by KPBS, notes that many states are now lined up against prediction market companies, which have strong support from the Trump administration.

Kalshi spokesperson Dani Lever said the exchange "cannot be regulated by 50 different regulators." The same report says sports typically make up 80% or more of weekly trading volume on prediction platforms.

What did Connecticut announce on 10 September?

Connecticut's Department of Consumer Protection (DCP) issued nine cease-and-desist orders, the governor's office announced on 10 September. The platforms named are Polymarket, Coinbase, Crypto.com, Robinhood, ProphetX, Novig, Webull, Gemini and Underdog Predict. Each order tells the company to stop marketing or selling sports contracts to people in the state.

The department also issued nearly 30 subpoenas. The recipients include licensed gaming service providers such as PayPal and Sportradar, 15 media organisations, and app stores and payment firms such as Apple, Google Play and Stripe. DCP said subpoena recipients are not themselves under investigation.

Platforms that do not comply could face civil penalties under the Connecticut Unfair Trade Practices Act or criminal penalties under state gaming law. The state says the platforms accept bets from people under Connecticut's legal betting age of 21 and from people on its self-exclusion list, and offer markets on Connecticut college sports.

Where does Kalshi stand in Connecticut?

Kalshi is not among the nine, but the state is already suing it. On 26 August 2026, Attorney General William Tong, the DCP and Governor Ned Lamont announced a lawsuit asking a court to bar Kalshi from taking sports bets in Connecticut without a licence.

That suit follows a December 2025 cease-and-desist order sent to Kalshi and two other sites. Kalshi challenged the order in federal court, but US District Judge Vernon Oliver denied its request for a preliminary injunction in August. Kalshi has appealed.

What it means for players

Connecticut's announcement also says the DCP ordered platforms to let residents withdraw funds they currently hold. The release refers to three platforms here without naming them, even though nine orders were issued. If you hold a balance on one of these apps, read its notices carefully.

Only three operators are licensed for sports wagering in Connecticut: DraftKings through Foxwoods, FanDuel through Mohegan Sun and Fanatics through the Connecticut Lottery. The minimum age for sports wagering there is 21.

Whatever the courts decide, a sports event contract can lose money just like a bet. Our responsible gambling guide covers limits and where to find support, and the Connecticut Council on Problem Gambling's 24/7 helpline is available on 1-888-789-7777. For background, read our coverage of how Americans view prediction markets and MLB's partnership with Polymarket.

Questions about the Kalshi Supreme Court case

Will the Supreme Court hear the Kalshi case?

Not yet. The court now has three petitions: New Jersey's, plus separate challenges to the Nevada ruling from Robinhood and Crypto.com. According to NPR, if the court takes New Jersey's case, it could hear arguments within months and rule by mid-2027.

What is the circuit split over prediction markets?

The Third Circuit sided with Kalshi against New Jersey, while the Ninth Circuit sided with Nevada. The two courts disagree on whether sports event contracts count as federally regulated swaps. The Tenth Circuit has since sided with Utah at the emergency stage, and further appeals, including Kalshi's Connecticut case, are still pending.

Can Connecticut residents still withdraw funds from these apps?

Connecticut's announcement says the DCP ordered platforms to let residents withdraw funds they hold, but it refers to three platforms without naming them. Check each app's notices.

Is Kalshi legal in Connecticut?

Not for sports contracts, according to Connecticut. The state treats Kalshi's sports contracts as unlicensed gambling and has sued to block them. Separately, Kalshi is appealing a federal judge's refusal to stop Connecticut enforcing its laws.

Source information checked on 13 September 2026. Court filings and state orders may change as the cases move forward.