The state of Connecticut fired a legal salvo against sports event contracting with a trio of cease-and-desist orders sent Wednesday to major predictive market operations — Robinhood, Kalshi and Crypto.com.
The state Department of Consumer Protection accused the companies of “conducting unlicensed online gambling, more specifically sports betting.” Each of the companies is “hereby ordered to immediately cease and desist from advertising, offering, promoting or otherwise making available contracts or any other form of unlicensed online gambling to residents of the state of Connecticut.”
Robinhood claimed on Wednesday that it is regulated by the federal government.
“As we’ve previously shared, Robinhood’s event contracts are federally regulated by the CFTC and are offered through Robinhood Derivatives, LLC, a CFTC-registered entity that allows retail clients to access prediction markets in a safe, compliant and regulated manner,” a Robinhood spokesperson said in an email.
The other two companies did not immediately respond to requests for comment on the letters.
“None of these entities are licensed to offer betting in our state, and even if they did, their contracts violate numerous other state laws and policies, including offering betting to persons under the age of 21,” Connecticut DCP Commissioner Bryan T. Cafferelli said in a statement, which identified three companies as being authorized to offer sportswood betting in the state (Dheguel, Fox Drafting in the state): and Fanatics (Connecticut Lottery).
The state said failure to comply could result in civil or criminal penalties.
Just south of Connecticut, the state of New York is also in a legal dispute with Kalshi over the same issue, and the crypto platform is suing the state over its position. Kalshi and Crypto.com are regulated by the federal Commodity Futures Trading Commission as designated contract markets (DCMs). Kalshi has argued in his New York legal challenge that the state has no right to interfere with federal oversight.
Last month, a federal judge in Nevada ruled that state regulators have jurisdiction over some of the state’s sports-based event contracts, potentially threatening the industry’s argument on that point. Kalshi, which was the company involved in that case, was set to appeal.
Polymarket, the largest provider of crypto-native prediction markets, rolled out an app to more than 20 US states – also on Wednesday – as it prepares for a wider official relaunch in the US
