Connecticut hits Kalshi, Robinhood, Crypto.com over sports event contracts

Connecticut orders Kalshi, Robinhood, and Crypto.com to halt sports event contracts, classifying them as illegal online gambling despite firms’ claims of CFTC oversight.

Connecticut’s Department of Consumer Protection has issued cease-and-desist orders to Kalshi, Robinhood, and Crypto.com, requiring the companies to immediately stop offering sports-related event contracts to state residents, according to state regulatory filings.

The department classified the products as unlicensed online gambling in violation of state wagering laws. Officials stated the three companies have been offering contracts tied to sports outcomes without meeting regulatory requirements imposed on licensed sportsbooks.

Kalshi faces struct regulation on Connecticut

The agency cited multiple violations, including offerings accessible to users under age 21, failure to meet platform integrity and technical standards, and absence of protections designed to prevent insider wagering. The department stated that unlicensed platforms lack consumer safeguards, leaving users without recourse if funds are lost or disputes arise.

Kalshi and Robinhood have contested the state’s classification, maintaining that their event-based markets fall under federal derivatives regulation rather than gambling law. Both companies stated the contracts are regulated by the Commodity Futures Trading Commission, characterizing them as financial instruments rather than wagers.

The dispute highlights a regulatory divide between state gambling authorities and prediction-market platforms that position themselves within the digital-asset and derivatives sector rather than as traditional sportsbooks.

State-regulated sportsbooks including FanDuel, DraftKings, and Fanatics operate in Connecticut under licensing conditions. The derivatives-style platforms present classification challenges for regulators determining their legal status.

The CFTC earlier in 2025 requested Crypto.com pause trading of sports-linked products, according to regulatory filings.

The enforcement action follows legislation signed by Governor Ned Lamont five months earlier that tightened gambling oversight. In June 2024, the state banned offshore betting platform Bovada and issued a cease-and-desist order.

The orders indicate Connecticut regulators intend to apply state gambling laws to digital-asset platforms offering sports-linked contracts, regardless of claims of federal oversight. The regulatory conflict between state gambling frameworks and CFTC-regulated derivatives venues has intensified as prediction markets have grown in popularity.