Recent News

The Connecticut Department of Consumer Protection (DCP) has issued Cease and Desist orders against Robinhood Derivatives, Crypto.com, and Kalshi for allegedly conducting unlicensed online gambling in the state of Connecticut.

According to the DCP’s Gaming Division, all three platforms were offering sports-related prediction contracts referred to as “sports event contracts”, without the required state license, in direct violation of Connecticut law. Formal letters outlining the violations were sent to each company.

State Officials: Only Licensed Sports Wagering Is Legal

“Only licensed entities may offer sports wagering in the state of Connecticut,” said Bryan T. Cafferelli, Commissioner of the DCP. He noted that none of the three platforms hold a Connecticut sports wagering license and added that, even if they did, the contracts in question would still violate multiple state laws and public policies—including rules prohibiting wagers by individuals under the age of 21.

Kris Gilman, Director of Gaming at the DCP, emphasized that these platforms are misleading consumers by implying their offerings are legal. “A prediction market wager is not an investment,” Gilman said, warning that operating outside a regulated framework exposes consumers to significant financial and data security risks.

Why Connecticut Says These Platforms Are Illegal

State regulators outlined several consumer protection concerns tied to unlicensed prediction market platforms offering sports-related contracts:

• No technical safeguards: Unlike licensed operators, these platforms are not required to meet Connecticut’s technical standards, potentially exposing users’ personal and financial data.
• Lack of integrity controls: There are no mandated systems to prevent insiders or individuals with advance knowledge from placing wagers or influencing outcomes.
• Unreviewed house rules: Settlement rules are not vetted by regulators, meaning advertised payouts may not be honored.
• No consumer recourse: If disputes arise, such as unpaid winnings—the DCP has no authority to recover funds for affected consumers.
• Insider-knowledge events: Some wagers are offered on events where outcomes may already be widely or privately known (e.g., award shows or professional trades), which Connecticut law prohibits.
• Illegal advertising and access: The platforms allegedly advertise to individuals on the state’s Voluntary Self-Exclusion List, market on college campuses, and allow wagering by excluded individuals and those under 21.

What the Cease and Desist Orders Require

The DCP ordered Robinhood, Crypto.com, and Kalshi to immediately stop advertising, offering, promoting, or otherwise making available any form of unlicensed online gambling—including sports event contracts to Connecticut residents. The agency also directed the companies to allow Connecticut users to withdraw any funds currently held on the platforms.

Failure to comply, the DCP warned, could result in further enforcement actions, including civil penalties under the Connecticut Unfair Trade Practices Act and potential criminal penalties under state gaming laws.

Who Is Licensed to Offer Sports Betting in Connecticut?

Connecticut law permits sports wagering only through three licensed operators:

• DraftKings (partnered with Foxwoods Resort Casino)
• FanDuel (partnered with Mohegan Sun)
• Fanatics (operated through the Connecticut Lottery)

Participants must be 21 or older to engage in online or in-person sports wagering or casino gaming in Connecticut. Fantasy sports contests have a lower minimum age requirement of 18.

Connecticut regulators are drawing a firm line between regulated sports wagering and unlicensed prediction markets that resemble gambling.

However, a federal court has temporarily blocked Connecticut from enforcing its cease-and-desist order against Kalshi while a jurisdictional dispute proceeds. Kalshi contends that its event contracts are federally regulated derivatives under the Commodity Futures Trading Commission, not state gambling law.