Kalshi will not get immediate protection from Connecticut gambling enforcement after a federal appeals court rejected its request for temporary relief while its wider injunction bid remains pending.
The U.S. Court of Appeals for the Second Circuit issued its August 19 order in KalshiEX LLC v. Cafferelli. Kalshi had asked the court to stop Connecticut officials from enforcing state gambling laws against its sports-event contracts during its appeal.
“IT IS HEREBY ORDERED that, to the extent Appellant moves for a temporary injunction pending review by a three-Judge panel, the motion is DENIED,” the court said.
Circuit Judge Sarah A. L. Merriam issued the order in New York. The ruling followed Kalshi’s Aug. 17 emergency request and U.S. District Judge Vernon D. Oliver’s refusal two days earlier to pause enforcement.
Second Circuit temporary relief decision leaves Kalshi injunction request for three-judge panel in Connecticut
The Second Circuit left Kalshi’s larger request unresolved and sent it to a three-judge panel.
“The motion for an injunction is referred to a three-Judge panel, to be heard in tandem with Appellant’s motion for an injunction in KalshiEX LLC v. Williams, No. 26-1835,” the court said.
Connecticut officials also received permission to file a full response.
“Appellees’ motion for leave to file a full opposition by August 24, 2026 is GRANTED,” the order said. “Appellant may file a full reply in the ordinary course.”
Kalshi argues that the Commodity Futures Trading Commission has exclusive authority over its contracts under the Commodity Exchange Act.
“The district court therefore badly erred in denying Kalshi a preliminary injunction, and this Court’s intervention is necessary to prevent Kalshi from suffering irreparable harms under preempted state law before this Court has a chance to weigh in,” the filing says.
Kalshi also cited an August 11 CFTC emergency order tied to litigation in New York.
“Absent an injunction, Defendants could put Kalshi to an untenable choice between compliance with state law and a direct order from Kalshi’s federal regulator to do the opposite.”
Oliver previously found Kalshi had not shown its sports contracts were swaps subject to exclusive CFTC jurisdiction. He said the CFTC “lacks the authority to dictate an order that conflicts with this Court’s decision,” and rejected the appeal itself as grounds for emergency relief.
“While the Second Circuit may ultimately ‘disagree with certain features of this Court’s decision,’ the possibility for reversal alone (a possibility that exists in every appeal) does not warrant the extraordinary measure of injunctive relief,” Oliver wrote.
“A split in caselaw outside of this Circuit does not justify injunctive relief pending appeal, nor does the sheer fact that this is an issue of first impression,” Oliver wrote.
Connecticut first sent Kalshi a cease-and-desist letter in December 2025. Commissioner Bryan T. Cafferelli said, “Only licensed entities may offer sports wagering in the state of Connecticut. None of these entities possesses a license to offer wagering in our state, and even if they did, their contracts violate numerous other state laws and policies, including offering wagers to individuals under the age of 21.”
The Second Circuit gave no reason for denying temporary relief and has not decided the underlying enforcement dispute.
Featured image: Kalshi / Canva
