As of December 4, 2025, the Connecticut Department of Consumer Protection (DCP) has issued cease-and-desist orders directing Kalshi, Robinhood and Crypto.com to stop offering “sports event contracts” to Connecticut residents labeling them as unlicensed online wagering. The move affects how these firms offer prediction-market and crypto-based betting services and may force immediate changes to operations in the state.
What regulators ordered
On December 3, 2025, the DCP’s Gaming Division formally sent letters to KalshiEX LLC, Robinhood Derivatives LLC, and Crypto.com. The letters demand that the companies immediately cease advertising, offering, or providing any “sports event contracts” or similar products that the state views as unlicensed sports wagering. The DCP also requires platforms to allow Connecticut users to withdraw any funds currently held.
According to Commissioner Bryan T. Cafferelli, “only licensed entities may offer sports wagering in the state of Connecticut,” and none of the three companies holds a valid license. He added that their contracts violate other state laws and policies, including those restricting wagering to individuals 21 and older.
Why regulators say the platforms are in violation
The DCP contends that offering outcome-based sports event contracts regardless of how they are labeled by the firms qualifies as sports wagering under state law. Because none of the firms holds a Connecticut wagering license, their operation constitutes unlicensed gambling. The order also highlights concerns about consumer protections: the contracts aren’t subject to the same oversight as licensed sportsbooks, which imposes risks related to age verification, financial security, fair betting practices, and insider-information abuse.
The regulator cited specific problems: lack of required compliance with technical standards, absence of integrity controls and house rules, and marketing to underage individuals or those on the state’s voluntary self-exclusion list — practices prohibited under state law.
Platforms push back but legal uncertainty looms
Kalshi filed a lawsuit in Connecticut federal court on December 4, seeking an injunction to block enforcement of the cease-and-desist letters. The company argues its “event contracts” are regulated under federal law by the Commodity Futures Trading Commission (CFTC), and thus are not subject to state gaming statutes.
Robinhood and Crypto.com, for their part, have yet to publicly file their own legal challenge. Their responses may depend on how their product offerings are structured and whether they choose to comply, geofence services, or contest the state’s authority.
This clash spotlights a broader regulatory conflict: whether prediction-market platforms should be treated as gambling operations under state law, or as federally regulated derivative exchanges. The outcome could influence how similar platforms operate across the U.S.
Wider context and what this means for consumers
Connecticut legalized online sports wagering and casino gaming under a licensing regime beginning in 2021. Only a small number of approved operators such as DraftKings, FanDuel, and Fanatics Sportsbook are authorized to offer such services legally.
The DCP’s latest action underscores the state’s commitment to enforce those licensing rules, especially as new, crypto- or derivative-style betting products blur the lines between trading and gambling. For Connecticut residents using these platforms, it means immediate disruption and, potentially, a shift toward regulated sportsbooks.
What’s next
Kalshi’s lawsuit could delay enforcement at least temporarily depending on how the courts rule. Meanwhile, Robinhood and Crypto.com may decide whether to fight, comply, or rework their offerings in the state. Connecticut’s decision may prompt similar actions elsewhere, especially in states exploring how to regulate newfangled prediction markets.
This story will be updated as litigation progresses.
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Related Questions
Because the state’s regulator concluded that those contracts are effectively sports wagers and the firms lacked a Connecticut license making the offerings unlawful under state gambling laws.
Yes. The cease-and-desist order requires the platforms to allow current Connecticut users to withdraw their money.
Kalshi argues they are regulated federally by the CFTC, but Connecticut regulators say they violate state gambling statutes and thus must cease.
Licensed sportsbooks like DraftKings, FanDuel, and Fanatics Sportsbook remain authorized to operate the cease-and-desist only targets unlicensed event-contract platforms.
Yes. Connecticut’s move may encourage other states to challenge similar platforms potentially reshaping how prediction-market service providers operate nationwide.