A federal judge has ruled that Connecticut can apply sports betting regulations to the sports offerings from predictive markets. The ruling, made by Federal Judge Vernon Oliver on Monday, rejected a request from the platform Kalshi to block the Department of Consumer Protection (CT DCP) from applying those laws.
Background
Kalshi and Polymarket claim their platforms are more like a stock market, and the Commodities Futures Trading Commission (CFTC) has jurisdiction over such trading. However, the CFTC has filed lawsuits against Connecticut and several other states seeking to block them from imposing state gambling rules.
Connecticut has a right and a duty to protect consumers through the enforcement of our sports betting and gaming laws, said spokesperson Cathryn Vaulman. Kalshi has tried to dress up its unregulated gambling as something else entirely, but Connecticut and the court are not buying it.
Regulations
State law only allows three licenses for sportsbooks, and the operators must partner with the CT Lottery or either of the tribal casinos. All three licenses are currently in use, meaning no new companies can operate in Connecticut without a change.
Kalshi claimed in legal filings that it sells derivative contracts, which are financial agreements tied to events with financial or economic impacts. However, Oliver said Kalshi’s sports-related markets failed to meet that definition, and the outcomes of games are not events and the money wagered does not meet the definition of a financial impact.
Kalshi characterizes its sports-related event contracts in various ways, but at bottom, they are sports wagers, Oliver wrote in the ruling, citing another judge who made similar findings.
Appeal and Next Steps
Kalshi has already filed an intent to appeal the ruling. We respectfully disagree with the court’s decision and are considering all legal options, a company spokesperson said.
Lawmakers said they will look at additional regulations to address some of the other marketplaces Kalshi offers. When it comes to gaming, there are other operators that are following the laws that have been in place, said Sen. Paul Cicarella (R-North Haven). I don’t think somebody should come in and circumvent that.
Original reporting: NBC Connecticut — read the source article.
