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Connecticut has ordered Robinhood, Crypto.com and Kalshi to stop “unlicensed online gambling” through their prediction market platforms.
The state Department of Consumer Protection (DCP) sent mail to the three platforms on Wednesday, highlighting “sports betting” contracts.
In those letters, the DCP ordered the three companies “to immediately cease advertising, offering, promoting, or otherwise making available contract or any other form of unlicensed online gaming to Connecticut residents.”
Crypto.com, Kalshi and Robinhood Contracts Violate State Laws, Says DCP
DCP Commissioner Bryan Cafferelli said neither Crypto.com, Kalshi nor Robinhood have 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 people under 21 to place bets on events.
Meanwhile, DCP Gaming director Kris Gilman accused the platforms of “misleadingly advertising that their services are legal.”
Gilman added that all three platforms currently operate outside the state’s regulatory environment and pose “a serious risk to consumers who may not realize that bets placed on these illegal platforms offer no protection for their money or information.”
The agency also claimed that all three platforms currently lack integrity checks that would prevent insider betting or manipulation. He further claimed that the platforms advertise to self-defeating gamblers and college campuses while allowing betting on events with no known outcome, which they say gives insiders unfair advantages.
The legal review comes amid increased activity on prediction market platforms.
Forecast market volumes (Source: Token terminal)
Robinhood and Kalshi respond
A Kalshi spokesperson said its platform is “a nationally regulated exchange for real-world events, and is subject to exclusive federal jurisdiction.”
Kalshi too filed filed a complaint against the state regulator and claimed that “Connecticut’s attempt to regulate Kalshi encroaches on the federal regulatory framework that Congress established to regulate 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 as Polymarket re-enters the US market
The DCP cessation letters come just as Polymarket re-enters the US market, with the company announcing in the last 24 hours the launch of its US app.
Against all odds.
Polymarket’s US app is currently being rolled out to people on the waitlist.
We launch with sports, followed by markets for everything. pic.twitter.com/WOOoVMszrqc
– Polymarket (@Polymarket) December 3, 2025
Polymarket previously exited the US market as part of a settlement agreement with the CFTC. He comes back later acquisition of QCX under CFTC license for $12 million in July.
There are other regulatory threats, as evidenced by the battles Kalshi is currently embroiled in with several U.S. regulators.
Along with Connecticut’s recent actions, two neighboring states have already taken action.
New York sent Kalshi a cease and desist notice in October, while the Massachusetts state attorney general sued Kalshi in state court a month earlier.
Kalshi also received similar orders this year from Arizona, Illinois, Montana and Ohio. Litigation remains ongoing in New Jersey, Maryland and Nevada.
Despite regulatory challenges, Kalshi announced this week that it has closed a $1 billion funding round at a valuation of $11 billion. Kalshi and Polymarket also announced a series of partnerships with major companies, including the NHL, Google and UFC.
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