Kalshi's Legal Battle in Connecticut: A Prediction Market Fight

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00:00All right, let's get to another prediction market company, one of the prominent ones,

00:03Calci, of course, undergoing some changes in the state of Connecticut.

00:07They want to stay operating.

00:08The state of Connecticut says you got to get out.

00:11But at least the two sides have come together here to say, let's take a look at this coming

00:15up in February.

00:16That's really good news for Calci.

00:18But does this mean it's the beginning of the end for them there with this agreement?

00:23Yeah, this is a really interesting case in terms of all the state prediction market fights

00:28we have.

00:29Connecticut actually went as far to not just send cease and desist to Calci, but try to

00:35enforce them leaving the state.

00:36It's kind of common knowledge that whenever a cease and desist is sent, it doesn't really

00:41have a lot of weight or teeth behind it unless federal authorities get involved, or in this

00:46case, the Connecticut's Department of Consumer Protections getting involved, trying to kick

00:51Calci out of the state.

00:53In response, Calci kind of countersued them and took them to court.

00:56And now the Connecticut Department of Consumer Protection has agreed to a joint stipulation

01:02agreement, which pretty much puts this all into proceedings in court over the next two

01:08months.

01:09So that means that Calci will get to keep offering its prediction markets in Connecticut

01:13over the next two months while the legal proceedings play out.

01:16Calci pretty much argued that it would be harmed immediately if it had to leave the state and

01:21the cease and desist was enforced.

01:23So in response, Connecticut has agreed to respond to their motion for preliminary injunction by

01:30January 9th.

01:31Then Calci has until January 30th to respond.

01:34And then both sides go to court in U.S. District Court in Connecticut on February 12th.

01:39But this is just, you know, yet another example of how Calci is kind of balancing the many state

01:45fights it has over prediction markets.

01:47You know, certainly Nevada, New Jersey, Maryland, a host of other states have taken issue.

01:52Connecticut really, the one that's gone farthest with actually trying to get the cease and desist

01:57enforced.

01:57Obviously, Connecticut thinks that this is sports betting or unlicensed wagering.

02:02In their argument, they've said that, you know, they don't have the integrity monitoring

02:06procedures that licensed sports books have to have in Connecticut.

02:10Winnings are, may not be paid out as advertised because it kind of all goes down to the prediction

02:15market house rules and is really subject for the companies themselves.

02:19So, you know, not instances like where you have people going to the state arguing that, hey,

02:24DraftKings and FanDuel didn't pay me out correctly.

02:27There's actually a recourse for people who can, you know, work that through with the state.

02:31It's not in this case, as well as offering prediction markets to people under the age

02:36of 21.

02:36You have to be 18 to play on Calci and Connecticut obviously have to be 21, as well as offering

02:42markets that Connecticut says it's concerned about insider trading.

02:47These are things that are, you're not allowed to bet on, on sports books in Connecticut.

02:50Things like award shows, things like who's going to win NFL MVP, things that are kind of

02:55determined before they're announced, can bet on Calci.

02:59So it'll be a really interesting court case to follow among the other ones throughout,

03:03you know, the first two months of next year.

03:06What the judges initially, who they side with and how it might influence other states is obviously

03:12there's a lot of legal fights in Calci's hands right now.

03:15But so far they've been allowed to kind of just persist for the next couple of months.

03:20So we'll definitely keep an eye on this one.

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