Connecticut’s Department of Consumer Protection (DCP) has moved decisively against three major financial and crypto platforms—Robinhood, Crypto.com, and Kalshi—accusing them of running unlicensed online gambling services within the state. The department’s Gaming Division issued formal cease-and-desist orders on Wednesday, instructing all three companies to immediately stop offering or promoting “sports event contracts” and any other unauthorized betting products to Connecticut residents.
- State Regulators Accuse Platforms of Illegal Wagering
- Immediate Withdrawal Access Required for Connecticut Users
- Regulators Cite Major Concerns With Prediction Market Operations
- Possible Civil and Criminal Penalties Ahead
- Only Three Legal Sports Betting Operators in Connecticut
- Part of a Growing National Battle Over Prediction Markets
State Regulators Accuse Platforms of Illegal Wagering
In its notice, the DCP emphasized that none of the platforms hold a Connecticut sports wagering license, making their prediction-style betting products illegal under state law. DCP Commissioner Bryan T. Cafferelli stated that even if these companies attempted to obtain a license, several of their offerings would still violate existing regulations.
“Only licensed entities may offer sports wagering in the state of Connecticut,” Cafferelli said.
“None of these entities possess a license to operate here, and even if they did, their contracts violate additional state laws, including offering wagers to individuals under 21.”
Connecticut strictly limits legal sports betting to licensed operators partnered with its tribal casinos and state lottery system.
Immediate Withdrawal Access Required for Connecticut Users
Along with the cease-and-desist directive, the DCP ordered all three companies to ensure that Connecticut residents can withdraw funds deposited on their platforms without delay. The state noted that offering unauthorized gambling services creates financial risks for users, particularly because unregulated platforms provide no legal protections for consumer funds or personal data.
Kris Gilman, DCP’s Gaming Director, accused the platforms of misleading customers:
“These platforms are deceptively advertising that their services are legal,” Gilman said.
“When they operate outside a regulatory environment, consumers face serious risks, especially since wagers placed on illegal platforms provide no protections for money or information.”
Regulators Cite Major Concerns With Prediction Market Operations
Connecticut officials highlighted several deficiencies in these companies’ betting or prediction-market systems, including:
- No technical standards for safeguarding financial and personal information
- Lack of integrity controls, raising concerns over insider wagering
- No oversight of house rules, leaving consumers vulnerable
- No guaranteed recourse if a customer disputes a bet or loses funds
The state also alleged that the platforms targeted advertising toward self-excluded individuals and even college campuses, both strictly prohibited under Connecticut gaming laws.
Possible Civil and Criminal Penalties Ahead
If Robinhood, Crypto.com, or Kalshi fail to comply, the DCP warned it may pursue:
- Civil penalties, including fines under the Connecticut Unfair Trade Practices Act
- Criminal charges for violating state gambling statutes
These consequences could escalate if the companies continue offering unlicensed services or fail to disable access for Connecticut residents.
Only Three Legal Sports Betting Operators in Connecticut
Connecticut reminded the public that only three platforms are fully licensed and authorized to offer sports wagering in the state:
- DraftKings (in partnership with Foxwoods)
- FanDuel (in partnership with Mohegan Sun)
- Fanatics (partnered with the Connecticut Lottery)
Any other platform offering betting products is considered unlicensed and illegal under state law.
Part of a Growing National Battle Over Prediction Markets
The move by Connecticut is the latest in a growing wave of state-level crackdowns on emerging prediction-market and derivative-style betting platforms. Across the U.S., several states are reviewing whether platforms offering wagers on sports events, financial outcomes, elections, and real-world events qualify as gambling or commodities trading.
Regulators argue that allowing companies to operate without state licensing could undermine the integrity, accountability, and consumer protections required in legal gaming markets.
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