Connecticut deems sports contracts unlicensed gambling and orders platforms to halt access.
Regulators cite missing licenses, underage risks, and lack of consumer protections.
Enforcement adds to growing national scrutiny; Kalshi challenges order in federal court.
Connecticut regulators issued cease and desist orders to Kalshi, Robinhood, and Crypto.com after finding sports prediction contracts that the state classifies as unlicensed gambling. The orders require each platform to stop offering sports contracts to Connecticut residents and to permit immediate withdrawals of user funds. State officials warned of civil or criminal referrals for noncompliance.
State Enforcement Action and Regulatory Rationale
The Connecticut Department of Consumer Protection delivered the orders and cited state gaming statutes. DCP Commissioner Bryan T. Cafferelli said, “Only licensed entities may offer sports wagering in the State of Connecticut.” The agency noted the three firms lack state gaming approvals and that contracts allowed wagering by underage users.
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DCP Gaming Director Kris Gilman added, “They are also operating outside of a regulatory environment,” and he said consumers face missing protections on those platforms. The order directed platforms to stop advertising, offering, or promoting sports event contracts to state residents. It also required platforms to allow withdrawals for any Connecticut accounts without delay.
State officials stressed that only DraftKings, FanDuel, and Fanatics hold licenses to offer sports wagering in Connecticut. The order noted possible penalties, and it said civil fines or criminal actions could follow for breach of state law.
Legal Responses and Broader Industry Context
Kalshi responded by filing a suit in the Connecticut District Court seeking to block enforcement of the state order. The firm asserts it operates as a federally regulated derivatives exchange under CFTC rules. Kalshi also faces a separate class action tied to its sports contracts.
Robinhood and Crypto.com face related disputes in other states, and both firms paused or adjusted products amid regulatory pressure. Robinhood expanded its prediction market unit via the LedgerX acquisition, and Crypto.com suspended Nevada sports products after action by Nevada regulators. Industry observers noted a rising enforcement trend across states for unlicensed prediction markets.
According to state filings and market reports, regulators are increasing scrutiny of platforms that offer event-based contracts without state gaming licenses. The Connecticut action therefore adds to a growing body of enforcement and litigation affecting sports prediction markets nationwide.
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