Robinhood, Crypto.com and Kalshi directed to stop sports wagers in Connecticut

A jurisdictional fight is building over prediction markets after Connecticut ordered Robinhood, Crypto.com and Kalshi to stop offering sports event contracts, while the platforms continue defending their models under federal regulatory oversight.

Connecticut’s Department of Consumer Protection issued cease-and-desist letters to the three companies, telling them to halt unlicensed online gambling in the state and allow residents to withdraw funds currently held on their platforms. The action covers sports-related “prediction” products regulators call wagers.“Only licensed entities may offer sports wagering in the state of Connecticut, none of these entities possess a license to offer wagering in our state,” Consumer Protection Commissioner Bryan T. Cafferelli said in a statement. “Even if they did, their contracts violate numerous other state laws and policies.”

Federal oversight claim from Kalshi

Kalshi argues that federal law, not state gaming statutes, governs its activities.

“As other courts have recognized, Kalshi is a regulated, nationwide exchange for real-world events, and it is subject to exclusive federal jurisdiction,” a company spokesperson said. The spokesperson added that Kalshi’s services are “very different from what state-regulated sportsbooks and casinos offer their customers,” and noted that the company has filed suit in federal court.

A Dune dashboard shows that roughly 74% of bets on Kalshi involve sports-related markets.

State says consumer protections do not apply

Connecticut officials cite consumer protection concerns, saying unlicensed platforms are not required to follow the state’s technical standards. The department said those standards include controls related to data safeguards, blocking insiders from betting and monitoring suspicious patterns.

Gaming Director Kris Gilman said the firms are “deceptively advertising that their services are legal,” adding, “A prediction market wager is not an investment.”

Regulators also said there are no vetted house rules to govern payouts, which could limit recourse if disputes arise. The department alleged that the platforms listed events influenced by a limited group of insiders and made products available to individuals under 21, people on the state’s Voluntary Self-Exclusion List and users on college campuses.

Established operators in the state

Connecticut currently permits sports wagering only through three operators:
• DraftKings through Foxwoods
• FanDuel through Mohegan Sun
• Fanatics through the Connecticut Lottery

The minimum legal age is 21 for sports betting and 18 for fantasy contests.

The state’s online gambling framework was created through 2021 legislation and tribal-state compact amendments that limited statewide sports betting licenses to three entities.

Kalshi recently secured relief in Nevada when a federal judge ruled that the company could not be prosecuted under that state’s gambling statutes while its challenge against regulators continues. In October, Crypto.com agreed to suspend sports event market operations in Nevada after a federal court denied a preliminary injunction.