A recent ruling by a three-judge panel has left Kalshi facing ongoing civil lawsuits in Connecticut and New York. The panel, part of the United States Second Circuit Court of Appeals, dismissed their requests for injunctive relief, which would have shielded them from legal action by state authorities.

This decision, made public on November 3, 2026, clears the way for Connecticut Attorney General William Tong and New York Attorney General Letitia James to advance their lawsuits against Kalshi, and other designated contract market operators. Tong initiated legal proceedings against Kalshi in August, while James opted for a wider strategy, targeting Coinbase, Gemini Prediction, Kalshi, and Polymarket.

The panel’s ruling indicates that Kalshi did not meet the necessary criteria to warrant temporary protection from state enforcement of gambling laws. With this setback, both companies may need to reassess their strategies in these critical markets. Looking ahead, the primary goal for Coinbase, Kalshi, and other designated contract markets is to operate freely with event contracts in Connecticut and New York, avoiding penalties from state authorities. There are various options available to achieve this objective moving forward.