The state of Connecticut fired a legal volley against sports events contracts with a trio of cease-and-desist orders sent on Wednesday to major prediction-market operations — Robinhood, Kalshi and Crypto.com.
The state’s Department of Consumer Protection accused the companies of “conducting unlicensed online gambling, more specifically sports wagering.”Each of the companies are “hereby ordered to immediately cease and desist advertising, offering, promoting, or otherwise making available Contracts or any other form of unlicensed online gambling to Connecticut residents,” according to the state notices.
Robinhood argued on Wednesday that it’s regulated by the federal government.
“As we’ve previously shared, Robinhood’s event contracts are federally regulated by the CFTC and offered through Robinhood Derivatives, LLC, a CFTC-registered entity, allowing retail customers to access prediction markets in a safe, compliant, and regulated manner,” a spokesman for Robinhood said in an emailed statement.
The other two companies didn’t immediately respond to requests for comment on the letters.
“None of these entities possess a license to offer wagering in our state, and even if they did, their contracts violate numerous other state laws and policies, including offering wagers to individuals under the age of 21,” said Connecticut DCP Commissioner Bryan T. Cafferelli, in a statement, which identified three companies as having eligibility to offer sports wagering in the state: Draft Kings (via Foxwoods), FanDuel (Mohegan Sun) 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 its New York legal challenge that the state has no right to interfere with that federal oversight.
Last month, a federal judge ruled in Nevada that state regulators have jurisdiction over some of that state’s sports-based events contracts, potentially threatening the industry’s argument on this point. Kalshi, which was the company involved in that case, was set to appeal.
Polymarket, the biggest crypto-native prediction market provider, rolled out an app to more than 20 U.S. states — also on Wednesday — as it prepares for a broader official relaunch in the U.S.
