Connecticut has despatched notices to Kalshi, Robinhood, and Crypto.com for working unlawful on-line playing, notably sports activities betting. Connecticut has joined different states claiming an increase in unlawful sports activities betting below the prediction market umbrella, which has led to a setback for Kalshi, Robinhood, and Crypto.com.
Kalshi, Robinhood, and Crypto.com Ordered to Halt On-line Betting
The Connecticut Division of Client Safety (DCP) Gaming Division issued stop and desist orders to KalshiEX LLC, Robinhood Derivatives, LLC, and Crypto.com. The regulator has claimed that these platforms are conducting unlicensed playing actions, primarily sports activities betting.
“Solely licensed entities might provide sports activities wagering within the State of Connecticut,” stated DCP Commissioner Bryan T. Cafferelli. The official claims these corporations wouldn’t have a license to supply wagering within the state. He added that their contracts violate quite a few state legal guidelines and insurance policies, together with a prohibition on providing wagers to people below the age of 21.
DCP Gaming Director Kris Gilman, stated:
They’re additionally working outdoors of a regulatory setting, posing a severe danger to customers who might not notice wagers positioned on these unlawful platforms provide no protections for his or her cash or info. A prediction market wager shouldn’t be an funding.
Prediction market platforms providing “sports activities occasions contracts” are unlawful and put customers’ cash and private info in danger for a number of causes.
All three platforms are ordered to right away stop and desist from promoting, providing, selling, or in any other case making out there “sports activities occasion contracts” or some other type of unlicensed on-line playing to Connecticut residents. The DCP has additionally ordered all three platforms to permit Connecticut residents to withdraw any funds presently held on the platforms.
The order famous that failing to conform might end in further actions reminiscent of civil penalties and legal penalties for violating the state’s gaming statutes. Solely three gaming platforms DraftKings, FanDuel and Fanatics are licensed to supply sports activities wagering in Connecticut.
Challenges Confronted by Sport Prediction Markets
Kalshi, Robinhood, and Crypto.com are going through regulatory and authorized challenges. As CoinGape reported earlier, Kalshi confronted one other class motion lawsuit on allegations of working unlicensed sports activities betting. This comes as the corporate reaches $11 billion in valuation after $1 billion increase.
Kalshi has filed a lawsuit within the Connecticut District Courtroom in response to Connecticut’s newest order, searching for an injunction barring the enforcement of the cease-and-desist order. Lately, the agency says it operates solely as a federally regulated derivatives trade below the CFTC.
JUST IN: Kalshi has sued the Connecticut Division of Client Safety in federal courtroom alleging that state enforcement over sports activities occasion contracts is preempted by the CEA and it “intends to imminently search an emergency momentary restraining order and preliminary injunction.” pic.twitter.com/BdcoiPXP1a
— Daniel Wallach (@WALLACHLEGAL) December 3, 2025
Robinhood and Crypto.com have additionally confronted lawsuits for his or her sports activities prediction markets. Robinhood continues to increase its sports activities prediction market providing, with the newest acquisition of LedgerX. Notably, Crypto.com agreed to droop its sports activities prediction market choices in Nevada amid a authorized dispute with Nevada Gaming Management Board.
