【login stake】Connecticut probes Kalshi for allegedly breaking state law

The login stakeConnecticut Department of Consumer Protection’s Gaming Division confirmed to NEXT.ioit has an open investigation, which began in autumn, into Kalshi, which it said is “suspected of operating in violation of Connecticut law”.

Beyond this, however, the department said it would be unable to provide any more details at this time.

The news, first reported by Covers.com, would make Connecticut the fourth reported state to be investigating the business as its new sports contracts come under increased new scrutiny.

After being hit with cease-and-desist letters by regulators in New Jersey and Nevada, the company launched legal proceedings challenging the orders, highlighting that prediction markets are regulated by the federal government, not the states.

The two states, arguably the ones most associated with gambling in the US, were joined this week by Ohio, which sent cease-and-desist letters to Kalshi, alongside Robinhood and Crypto.com.

One of Nevada’s four congressional representatives, Dina Titus, who has previously criticised prediction markets, sent a letter yesterday to US derivatives regulator the Commodity Futures Trading Commission (CFTC).

In the letter Titus, who is co-chair of the Congressional Gaming Caucus, petitioned the CFTC to prohibit individuals from trading sports contracts until ongoing litigation had completed.

She wrote: “While I understand that the Commission has announced a process to collect additional information and data regarding prediction markets generally to inform future regulatory action, the Commission also has a responsibility to enjoin entities under its regulatory purview from actively violating the laws of Nevada, New Jersey, Ohio, and other jurisdictions during the pendency of this process.

“Therefore, pursuant to the Commodity Exchange Act, I request contracts related to political and sports events be stayed.”

Shortly after Connecticut’s probe into Kalshi was reported, it was revealed that the Illinois Gaming Board has also issued the company with a cease-and-desist order.