Robinhood, Crypto.com and Kalshi directed to stop sports wagers in Connecticut
Summary
Connecticut’s Department of Consumer Protection has issued cease-and-desist letters to Robinhood, Crypto.com and Kalshi, ordering them to stop offering sports-related prediction contracts to state residents and to allow withdrawals of funds held on their platforms. The department says these products amount to unlicensed sports wagering and raise consumer-protection concerns such as inadequate technical standards, insider exposure, and availability to underage or self-excluded users.
Kalshi disputes the state action, arguing its markets fall under exclusive federal jurisdiction and are different from state-regulated sportsbooks; the firm has filed suit in federal court. The move follows related legal tussles in other states — Kalshi recently won relief in Nevada, while Crypto.com suspended Nevada sports-event markets after a court decision. Connecticut currently permits sports betting only through three licensed operators: DraftKings (via Foxwoods), FanDuel (via Mohegan Sun) and Fanatics (via the Connecticut Lottery), with a minimum legal age of 21 for sports betting.
Key Points
- Connecticut’s Department of Consumer Protection issued cease-and-desist orders to Robinhood, Crypto.com and Kalshi over sports-related prediction markets.
- The state says the firms are offering unlicensed online wagering and must allow Connecticut users to withdraw funds.
- Regulators cite gaps in consumer protections: technical controls, insider-betting safeguards, monitoring suspicious patterns, and clear house rules for payouts.
- Kalshi argues federal law governs its exchange and has filed a federal lawsuit; it points to prior court rulings supporting federal oversight.
- About 74% of Kalshi’s activity reportedly involves sports-related markets, according to a Dune dashboard referenced in reporting.
- Connecticut restricts sports wagering to three licensed operators under its 2021 framework, creating a licensing and jurisdiction clash with nationwide prediction platforms.
Context and relevance
This story sits at the heart of a growing regulatory clash between state gambling frameworks and nationwide prediction-market platforms. The legal outcome could set precedent on whether prediction markets are regulated at federal or state level — with big implications for platforms, licensed operators and consumer protections across other US states. Operators, compliance teams and legal advisers in gaming and fintech should watch this closely, as rulings may determine market access, product design and age/self-exclusion controls going forward.
Why should I read this?
Quick heads-up: this is where prediction markets meet state regulators — and it’s getting spiky. If you work in gaming, compliance, fintech or run a marketplace, this piece tells you who’s fighting who and why it matters. We skimmed the legal bits so you don’t have to — worth a read to keep ahead of potential changes to where and how these products can operate.
Author style
Punchy — this is a high-stakes regulatory showdown that could reshape access to prediction markets nationwide. If you need to understand immediate operational and legal risks, read the details.
