Connecticut Orders Robinhood, Kalshi and Crypto.com to Halt Sports Event Contracts

Connecticut regulators have issued cease-and-desist orders to Robinhood, Kalshi and Crypto.com, accusing the companies of offering unlicensed online gambling through sports event contracts. The Department of Consumer Protection (DCP) said the platforms were “conducting unlicensed online gambling, more specifically sports wagering,” and directed them to immediately stop promoting or providing these contracts to state residents. Officials warned that violations could trigger civil or criminal penalties.

Robinhood pushed back, emphasizing that its event contracts are regulated at the federal level. A spokesperson said the products are overseen by the U.S. Commodity Futures Trading Commission (CFTC) and offered through a CFTC-registered entity, arguing this structure provides safe and compliant access to prediction markets for retail users. Kalshi echoed this argument, stating that it operates as a federally regulated exchange with exclusive federal jurisdiction and that its services differ fundamentally from state-regulated sportsbooks. The company added that it has already filed suit in federal court to defend its position. Crypto.com has not yet commented on the Connecticut action.

Connecticut authorities countered that none of the three companies are licensed to offer wagering in the state, stressing that only DraftKings (through Foxwoods), FanDuel (via Mohegan Sun) and Fanatics (under the Connecticut Lottery) are authorized to operate. Regulators also highlighted concerns about underage access, noting that wagering must be restricted to users 21 and older.

The legal fight reflects a broader national tension as states push back against federally regulated prediction markets. New York is already in dispute with Kalshi, which is suing the state for attempting to block its event contracts. A recent Nevada court ruling also determined that state regulators have authority over certain sports-based event markets, challenging the industry’s claims of exclusive federal oversight.

Meanwhile, Polymarket, a leading crypto-native prediction market, expanded access to its app across more than 20 U.S. states as it prepares for a larger U.S. relaunch, signaling growing competition and scrutiny in the prediction market sector.