Connecticut vs. Prediction Market: Kalshi got a stay order and will see court in February

Recently, a lawsuit has been fought between the state of Connecticut and prediction market platform Kalshi.

Here’s the thing: On December 2, the Connecticut Department of Consumer Protection issued a restraining order to Kalshi, Robinhood, and Crypto.com. Reason? said they engaged in sports contracts, which is considered unlicensed online gambling in Connecticut. Kalshi, of course, was not convinced and sued the state the next day.

The turning point came Monday when federal judge Vernon Oliver issued an interim ruling. He said that until the court hears the matter formally, the state government should refrain from taking action against Kalshi. This is equivalent to giving Kalshi a buffer period.

The next timeline is also scheduled: the state consumer protection department has until January 9 to submit its response, and Kalshi has until January 30 to submit additional evidence to support himself. An oral debate is expected between the two sides in mid-February.

This case is actually quite interesting. Is prediction market gambling? How to define the nature of a sports event contract? Connecticut made a big move this time, targeting three platforms at once, and it seems that it is preparing to set a rule in this area. Kalshi’s ability to obtain a stay indicated that the court felt that there was still room for discussion on this matter, not a one-sided situation.

The line between regulation and innovation has never been easy to draw.