The Connecticut legislature is moving toward a landmark compromise on prediction markets with the introduction of House Bill 5038.
The bill, which underwent a public hearing on February 18, aims to establish a formal regulatory framework for speculative event contracts while imposing strict age limits and advertising protections.
Strict Controls and Consumer Protections
If approved, the measure would take effect on July 1, 2027, requiring all platforms operating in the state to implement 21+ age verification and self-exclusion tools. The bill also imposes significant civil penalties, up to $50,000 for a continuing course of conduct, for operators who fail to prevent underage participation.
The Department of Mental Health and Addiction Services voiced strong support for the 21+ limit, stating:
“Prediction markets expose participants to financial loss and behavioral risks similar to gambling and high-risk speculative trading.”
Dissent from Tribes and Industry Leaders
The bill has faced pushback from the Mashantucket Pequot and Mohegan Tribes, who argue that prediction markets could undermine existing gaming compacts that have generated over $9 billion in state tax revenue.
Meanwhile, the prediction market giant Kalshi opposed the state-led measure, arguing that these markets are already federally regulated by the CFTC and should not be subject to a patchwork of state laws.
House Bill 5038 also mandates a comprehensive study on the impact of these platforms, involving input from the tribes and the Connecticut Lottery Corporation.
