A US judge has handed Kalshi a small win after putting a temporary stop to the Connecticut Department of Consumer Protection’s enforcement action against the company.
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A US judge has granted prediction markets platform Kalshi a temporary reprieve from enforcement after the state of Connecticut sent it a cease and desist order last week for allegedly conducting unlicensed gambling.
The Connecticut Department of Consumer Protection (DCP) sent Kalshi, along with Robinhood and Crypto.com, on Dec. 2, accusing them of “conducting unlicensed online gambling, more specifically sports wagering, in Connecticut through its online sports event contracts.”
Kalshi sued the DCP a day later, arguing its event contracts “are lawful under federal law” and its platform was subject to the Commodity Futures Trading Commission’s “exclusive jurisdiction,” and a motion on Friday to temporarily stop the DCP’s action.
Connecticut federal court judge Vernon Oliver said in an on Monday that the DCP must “refrain from taking enforcement action against Kalshi” as the court considers the company’s bid to temporarily stop the regulator.
The order adds that the DCP should file a response to the company by Jan. 9 and Kalshi should file further support for its motion by Jan. 30, with oral arguments for the case to be held in mid-February.
Kalshi is a federally regulated designated contract maker under the CFTC and, in January, began offering contracts nationally that allow of events such as sports and politics.
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Its platform has become hugely popular this year and saw a record $4.54 billion monthly trading volume in November, attracting billions in investments, with Kalshi closing a earlier this month at a valuation of $11 billion.
However, multiple US state regulators have taken issue with Kalshi’s offerings, which have led to the company being embroiled in lawsuits over whether it is subject to state-level gambling laws.
the New York State Gaming Commission in October after the regulator sent a cease and desist order claiming it offered a platform for sports wagering without a license.
In September, Massachusetts’ state attorney general in state court, which the company asked to be tossed. So far this year, Kalshi has sued state regulators in New Jersey, Nevada, Maryland and Ohio, accusing each of regulatory overreach.
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