Connecticut has issued cease and desist orders to Robinhood, Kalshi, and Crypto.com, accusing the three firms of running unlicensed sports betting through online event contracts. The state’s Department of Consumer Protection sent formal notices on Wednesday, claiming the companies were offering sports wagering without approval.
According to the agency, the platforms made event contracts available to users in a way that amounted to online gambling. DCP Commissioner Bryan Cafferelli stated that none of the companies had permission to offer wagering in Connecticut and that the contracts also broke other state rules, including allowing bets from users younger than 21.
State Accuses Firms of Illegal Activity
DCP Gaming Director Kris Gilman said the firms promoted their services as lawful when they were not. Gilman warned that users might think their funds or private information were protected, even though the platforms were operating outside the state’s oversight structure.
Prediction markets have drawn growing legal attention in several states this year. These platforms let users place money on outcomes of elections, sports, and a wide range of public events. Their rapid growth has led to large investment flows and sharper regulatory focus.
Kalshi pushed back on Wednesday with a complaint filed against the DCP. The company said Connecticut’s move clashed with federal rules that govern derivatives trading on approved exchanges. Kalshi stated that its operations fall under the Commodity Futures Trading Commission’s exclusive authority and its sports-related contracts comply with federal law.
Robinhood issued a statement saying its event contracts are regulated by the CFTC and offered through a registered subsidiary. The company said this setup gives retail customers access to prediction markets in a safe and compliant environment.
In contrast, Connecticut’s DCP said these platforms expose users to risks because they lack required technical safeguards and limits for data protection. The agency also said they operate without reliable controls to stop insider activity, allow betting on events that already have known outcomes, and advertise in areas where vulnerable groups may be present.
Only DraftKings, FanDuel, and Fanatics hold legal sports wagering licenses in Connecticut, and all three require users to be at least 21.
Kalshi Faces Widening State Pushback
Connecticut is one of several states confronting Kalshi. New York issued a cease and desist in late October, leading the company to file suit two days later. Massachusetts also took the firm to court in September. Earlier in the year, Arizona, Illinois, Montana, and Ohio issued similar orders. Ongoing legal fights are active in New Jersey, Maryland, and Nevada.
Despite the legal tension, Kalshi said this week that it completed a $1 billion funding round at an $11 billion valuation following record trading volume in November.