Connecticut Considers 21+ Age Limit For Prediction Markets

Connecticut lawmakers are considering age restrictions and advertising bans for prediction market platforms under House Bill 5038. The new bill defines a prediction market platform as any service allowing consumers to open speculative positions on future events in a bid-ask format. 

HB 5038 mandates platforms operating in Connecticut to ascertain that users are at least 21 years old and physically located within the state before permitting account creation.

Self Exclusion Tools and Account Suspension Requirements

The bill requires platforms to implement voluntary self exclusion tools. These systems must allow individuals to prevent themselves from opening accounts, placing positions or exceeding set spending thresholds.

If an underage user is allowed to participate, the operator must immediately suspend the account and close all open positions. The platform is also obligated to return any remaining funds. Access must then be denied until the individual reaches 21 years of age.

Advertising Bans, Civil Penalties and Regulatory Oversight Framework

Advertising provisions would prohibit marketing to consumers under 21, including those on college campuses. Operators are also barred from using endorsements, imagery or language appealing to those below the legal age group. Civil penalties from the Attorney General could reach $10,000 per violation, increasing to $50,000 for continued conduct. 

The Department of Consumer Protection would be tasked with drafting and enforcing regulations. The agency would also conduct a study in consultation with the Attorney General and the two federally recognised tribes in the state. The review would assess youth participation, advertising practices, problem gambling impacts and revenue implications for master wagering licensees. If enacted, the bill would take effect on 1 July 2027.

Governor Lamont and Public Organisations Back the New Bill

A public hearing on HB 5038 took place on 18 February. The Department of Mental Health and Addiction Services expressed support for the proposal. 

Its commissioner stated that participants in prediction markets also face similar risks of financial loss and addiction as gambling and high-risk speculative trading. The agency reported that some clients seeking treatment for sports betting problems also visit prediction markets. The  21-year minimum is consistent with existing casino and sports betting standards.

The National Alliance on Mental Illness Connecticut offered conditional backing. The group said it does not support the gambling component, but understands the rationale for regulation. It mentioned the risk of addiction among young people and brain development concerns. The organisation endorsed a 21+ age limit and advertising restrictions.

Furthermore, Governor Ned Lamont’s office supported the bill. They stated that prediction markets have blurred the lines between investing and gambling, and can put individuals under 21 in harm’s way.

The Connecticut Lottery Corporation also backed a measured regulatory approach, requesting inclusion in the study. Its role as a master wagering licensee and contributor to the General Fund was also highlighted.

Kalshi, Tribal Nations Raise Legal and Integrity Concerns

Opposition emerged from several parties during the hearing process. A Kalshi representative argued that prediction markets are federally regulated rather than subject to the state. Hence, no state action should override federal guidance.

The Mashantucket Pequot Tribal Nation and the Mohegan Tribe also objected to the bill. They contended that gaming based prediction markets are already illegal in Connecticut. Therefore, regulating these activities could create confusion and potentially legitimise offshore operators.

The tribes referenced ongoing federal litigation, including cases involving Kalshi, and cautioned against conflicting rulings. They asserted that the bill could jeopardise tribal state gaming compacts that have generated nearly $400m in recent tax revenue and more than $9bn overall. 

Furthermore, the University of Connecticut submitted testimony that was partially critical of the bill. The university warned that prediction contracts on collegiate or amateur sporting events present integrity risks for student athletes. It supported age and advertising limits but called for additional prohibitions on contracts linked to college sports outcomes. The institution cited harassment data and recent federal indictments involving alleged point shaving schemes as justification for stronger restrictions.