Kalshi’s legal troubles in Connecticut continue to mount after the state sued the prediction markets platform and filed for a court injunction to block the firm from offering sports betting to players.
Attorney General William Tong, Department of Consumer Protection Commissioner Bryan T Cafferelli and Governor Ned Lamont all claim Kalshi offers sports event contracts that resemble sports betting.
The 24-page document seeks a temporary or permanent injunction preventing Kalshi from offering any sports wagering service in Connecticut, and for the platform to pay restitution and civil penalties for each violation of state law.
It also looks for Kalshi to “disgorge all revenues, profits and gains achieved in whole or in part through the unfair and/or deceptive acts or practices complained of herein”.
In a statement, Tong said Kalshi’s offering was not “magically shielded” by federal law from the state’s “commonsense consumer protection laws”.
Kalshi and other prediction markets continue to argue they are regulated federally by the Commodity Futures Trading Commission and do not require state-level sports betting licences. They have also classified the markets “swaps” and not sports betting.
Tong noted the laws are in place to protect minors and problem gamblers and that the injunction would “put a stop” to the risk of related harms.
Lamont echoed Tong’s claims, highlighting that the legalisation of sports wagering in 2021 was brought in “to create a safe, responsibly regulated market for Connecticut consumers, not to open a free-for-all on sports betting”.
Cafferelli said: “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.”
In response, Kalshi’s head of litigation Jovy Dedaj said: “Connecticut just filed this lawsuit to shutdown Kalshi immediately, but they’re okay with other prediction markets operating there in the meantime.
“This is the latest in a line of arbitrary and inconsistent enforcement by the states, which shows this has nothing to do with consumer protection. If it did, the states would be seeking the same relief across the board. This unequal treatment is exactly why federal oversight is necessary.”
The legal action comes after Connecticut’s Department of Consumer Protection Gaming Division sent cease-and-desist letters to Kalshi, Robinhood and Crypto.com last December – the regulator claiming the trio were offering sports betting in the state without a licence.
In response, Kalshi sued the state on the grounds event contracts are swaps and thereby regulated by the Commodity Futures Trade Commission.
That motion was denied by US district judge Vernon Oliver midway through August, ruling the platform’s sports-related event contracts are sports wagers by another name.
Kalshi’s latest case in Connecticut comes after court losses in several states over the last 12 months, including New York, Washington and Nevada.
In Nevada, it has agreed to use third-party geofencing software to prevent consumers from accessing the platform.
The post Connecticut sues Kalshi for “offering unlicensed sports wagers” first appeared on EGR Intel.
Prediction markets’ legal troubles in the state continue, with latest lawsuit seeking a permanent injunction against platform
The post Connecticut sues Kalshi for “offering unlicensed sports wagers” first appeared on EGR Intel.