Kalshi appeals to Connecticut federal court to halt state enforcement

Kalshi filed an emergency appeal with the Second Circuit on Tuesday, asking federal judges to block Connecticut gambling regulators from enforcing state law against the exchange while its broader preemption case proceeds.

The Connecticut Superior Court declined last week to extend the CFTC's federal stay into state proceedings, leaving Kalshi exposed to enforcement action under Connecticut gambling statutes. The Second Circuit filing argues that the lower court misread the scope of federal preemption under the Commodity Exchange Act.

The appeal sharpens a question the Connecticut litigation has avoided: whether a state can enforce gambling law against an entity operating under active CFTC designation, or whether that designation occupies the field entirely. Connecticut regulators have signaled they intend to proceed regardless of the federal stay.