In a move that many industry observers would call inevitable, the state of Connecticut has filed suit against Kalshi, claiming that the prediction market platform offers illegal gambling to residents and visitors within Connecticut’s borders.
The new legal complaint, filed by Connecticut on Wednesday, was made possible by a recent District Court ruling that denied Kalshi injunctive relief against the state. Kalshi has since filed an emergency appeal with the Second Circuit, but Connecticut did not wait that long to pursue its own actions against the popular CFTC-regulated exchange.
In an official press release published on Wednesday night, Connecticut Attorney General William Tong said:
“Sports event contracts are no different than sports betting and are not magically shielded by federal law from Connecticut’s commonsense consumer protection laws. These laws exist for a reason—to protect minors, to prevent problem gambling, to ensure your money is safe and your personal information is protected. None of that is happening now on Kalshi, and we’re suing to put a stop to it.”
Governor Ned Lamont added, “These prediction markets put Connecticut consumers, young people, our student athletes, and those suffering from gambling addiction at serious risk. They have made it clear their goal is profits over people, and that’s why we are holding them accountable. When we legalized sports wagering in 2021, the goal was to create a safe, responsibly regulated market for Connecticut consumers, not to open a free-for-all on sports betting. We did this in coordination with our tribal partners, recognizing the importance of our government-to-government relationship and acknowledging tribal sovereignty in gaming operations, something we have honored for more than three decades.”
Connecticut Department of Consumer Protection (DCP) Commissioner Bryan Cafferelli stated, “These markets have been waging a coordinated campaign to convince people they are offering investments that are somehow safe when the reality is they are indistinguishable from sports wagering. They target minors and individuals who have purposefully opted out, don’t adhere to any of our technical standards designed to protect consumers’ money and personal information, and violate all of Connecticut’s gaming laws.”
Kalshi has filed emergency motions with the Second Circuit Court of Appeals to prevent both New York and Connecticut from enforcing state gambling laws on the exchange. Although there is no exact timeline for when the Second Circuit might rule on the two separate motions, observers are currently “on watch” for the ruling that pertains to New York.
Kalshi’s emergency motion to block Connecticut may take a while longer, but will still likely receive a ruling by the Appeals Court by the end of next month. It is unlikely that Kalshi will be forced to geofence its products in either state until the corresponding Appeals Court rulings are drafted and made public.
Loading …
