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State of Play
- Connecticut lawmakers are debating House Bill 5038, a narrowly framed measure to restrict prediction market access for people under 21 while leaving broader legal questions unresolved.
- The move could affect how federally regulated platforms like Kalshi coexist with the state’s tribal compacts and the Connecticut Lottery.
Connecticut lawmakers held a hearing after Gov. Ned Lamont proposed House Bill 5038, which would establish age and advertising guardrails aimed at keeping prediction markets out of the hands of people under 21.
Prediction markets let users buy and sell ‘‘event contracts’’ that pay out based on real-world outcomes. Some platforms accept bettors 18 and older and are regulated by the Commodity Futures Trading Commission (CFTC) rather than state gambling authorities.
Tribal operators – the Mohegan Tribe and the Mashantucket Pequot Tribal Nation – opposed the bill at the Hartford hearing, warning it could undermine the state-tribal gaming compact that grants the tribes and the Connecticut Lottery exclusive online gaming rights.
Kalshi and other firms argue they are federally regulated and not equivalent to sports betting or online casinos. Kalshi has already sued Connecticut after receiving a cease-and-desist letter.
Health advocates concerned about problem gambling rise
The dispute raises practical and protection questions. If the state moves to ban or tightly regulate prediction markets for those under 21, younger bettors could be blocked while older players may still face uncertain access depending on legal outcomes.
Tribal partners and the Connecticut Lottery stress that prediction markets operating outside the state’s compact would introduce an untaxed, less-regulated product that lacks consumer safeguards: voluntary exclusion, spending limits, and support services that currently exist under the compact.
Operators like Kalshi counter that federal oversight by the CFTC already provides a regulatory framework and that coexistence is possible without cannibalizing casino or sports wagering revenue.
The state and tribes currently receive millions in monthly payments tied to the compact, so any market entry that erodes those streams could prompt tougher enforcement or renegotiation. Public health advocates also caution that prediction markets could increase problem gambling risk because they lack Connecticut’s established responsible gambling protections and treatment resources.
Based on reporting by Ella Napack for CT Insider.
