Second Circuit denies Kalshi and Coinbase injunction requests in New York and Connecticut

At the U.S. Court of Appeals for the Second Circuit, Kalshi lost its bid for temporary relief against authorities in New York and Connecticut, and Coinbase was refused a preliminary injunction in Connecticut. On Tuesday, Nov. 3, a three-judge panel held that the prediction market companies cannot stop state regulators from pursuing enforcement action while their cases continue.

The combined decision covered Kalshi's litigation with the New York State Gaming Commission (NYSGC). It also covered the operator's court case against the Connecticut Department of Consumer Protection (DCP). The third matter was Coinbase's case against Connecticut Attorney General William Tong and other state officials.

The court order states: "Upon due consideration, it is hereby ordered that the motions are denied because appellants have failed to make the required showing that an injunction pending appeal is warranted." No details about the rationale for the decision appeared in the order. The ruling would appear to leave New York and Connecticut officials free to pursue further enforcement actions against the company's sports event contracts. In the officials' view, those contracts are functionally similar to a sports betting product that the states license, regulate and tax.

Kalshi is preparing a response to New Jersey's Supreme Court petition, to be filed by Dec. 7.