Connecticut accused Kalshi of engaging in "unlicensed gambling," prompting a judge to urgently halt law enforcement

Last week, the Connecticut Department of Consumer Protection (DCP) abruptly issued a ban on Kalshi, Robinhood, and a crypto exchange for “engaging in unlicensed online gambling through sporting event contracts.” It came quite suddenly - just after the ban was issued on December 2, Kalshi took DCP directly to court the next day.

However, the plot quickly took a turn. On Monday, federal judge Vernon Oliver ruled that during the hearing of Kalshi’s emergency application, the DCP must stop and cannot take enforcement action against Kalshi. The timeline given by the court is as follows: DCP has until January 9 to submit its response, Kalshi has until January 30 to supplement supporting documents, and the two sides will argue in person in court in mid-February.

What is interesting about this case is where is the line between prediction markets and traditional gambling? Kalshi obviously doesn’t intend to recognize this “gambling” hat. The legal confrontation in the coming months is expected to set the tone for the entire prediction market industry.