Connecticut has ordered Robinhood, Crypto.com and Kalshi to stop “unlicensed online gambling” through their prediction market platforms.
The state’s Department of Consumer Protection (DCP) has issued a notice letters to the three platforms on Wednesday, focusing on “sports betting” contracts.
In the letters, the DCP ordered the three companies “to immediately cease advertising, offering, promoting or otherwise making available contracts or any other form of unlicensed online gambling to residents of Connecticut.”
Contracts from Crypto.com, Kalshi and Robinhood violate state laws, DCP says
DCP Commissioner Bryan Cafferelli said neither Crypto.com, Kalshi nor Robinhood had the necessary licenses to offer their prediction markets in Connecticut.
He added that even if they did, “their contracts violate numerous other state laws and policies,” which Cafferelli said include allowing individuals under the age of 21 to place bets on events.
Meanwhile, DCP Gaming director Kris Gilman has accused the platforms of “deceptively advertising that their services are legal.”
Gilman added that all three platforms currently operate outside state regulations and “pose a serious risk to consumers who may not realize that betting on these illegal platforms does not protect their money or information.”
The agency also claimed that the three platforms currently have no integrity controls that would prevent betting or manipulation by insiders. It additionally alleged that the platforms advertise to self-destructive gamblers and on college campuses while allowing betting on events with no known outcome, which they believe gives insiders unfair advantages.
The legal investigation comes amid increased activity on prediction market platforms.
Market volume forecast (Source: Token terminal)
Robinhood and Kalshi respond
A spokesperson for Kalshi said the platform “is a regulated, nationwide exchange for real-world events, and is subject to exclusive federal jurisdiction.”
Kalshi too submitted filed a complaint against the state regulator, claiming that “Connecticut’s attempt to regulate Kalshi violates the federal regulatory framework Congress established for regulating derivatives on designated exchanges.”
A Robinhood spokesperson said in a statement that “Robinhood’s event contracts are federally regulated by the CFTC and offered through Robinhood Derivatives, LLC, a CFTC registered entity.”
Crypto.com has not yet commented.
DCP notices come just as Polymarket re-enters the US market
The DCP’s cease and desist letters come just as Polymarket has re-entered the US market, with the company announcing the launch of its US app in the past 24 hours.
Against all odds.
Polymarket’s US app is now rolling out to those on the waitlist.
We’ll launch with sports, followed by markets for everything. pic.twitter.com/WOoVMszrqc
— Polymarkt (@Polymarkt) December 3, 2025
Polymarket had previously exited the US market as part of a settlement agreement with the CFTC. It then comes in again acquiring the CFTC-licensed QCX for $12 million in July.
There are even more regulatory threats, as evidenced by Kalshi’s current battle with several US regulators.
In addition to Connecticut’s recent action, two neighboring states have previously taken action.
New York sent Kalshi a cease and desist order in October, while the Massachusetts attorney general had sued Kalshi in state court a month earlier.
Kalshi has also received similar orders this year from Arizona, Illinois, Montana and Ohio. There are still pending lawsuits in New Jersey, Maryland and Nevada.
Despite the regulatory challenges, Kalshi announced this week that it has closed a $1 billion funding round at an $11 billion valuation. Kalshi and Polymarket have also announced a series of partnerships with major companies, including the NHL, Google and the UFC.
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