Connecticut’s Department of Consumer Protection (DCP) has issued cease-and-desist orders to three prediction market operators it says are illegally offering online sports wagering in the state.
The directive, sent to Kalshi, Robinhood, and Crypto.com, requires each platform to immediately stop advertising or providing sports event contracts, or any other form of what the state considers unlicensed gambling services to Connecticut residents.
State officials said none of the companies holds a Connecticut sports wagering licence and argued that the products offered also violate several other statutory requirements, including prohibitions on wagering by individuals under age 21.
Regulators further argued that platforms presenting themselves as lawful prediction markets are misleading consumers and operating outside the oversight required for gambling activities in the state.
DCP Commissioner Bryan T. Cafferelli said only approved operators may offer sports wagering, and emphasised that unlicensed platforms expose users to financial and personal risks.
Connecticut currently authorises only three operators to provide sports betting: DraftKings in partnership with Foxwoods, FanDuel with Mohegan Sun, and Fanatics through the Connecticut Lottery.
These entities are required to implement integrity monitoring, adhere to technical and security standards, and ensure compliance with all consumer protection rules.
DCP Gaming Director Kris Gilman said: “[Prediction markets operate] outside of a regulatory environment, posing a serious risk to consumers who may not realise wagers placed on these illegal platforms offer no protections for their money or information. A prediction market wager is not an investment.”
Prediction markets fail to meet Connecticut’s standards
According to the agency, the platforms do not follow Connecticut’s technical standards, maintain no integrity controls, and publish house rules that have not been reviewed by regulators.
Officials also highlighted the risk that insiders could influence or trade on known outcomes, creating a significant fairness issue for the public.
The cease-and-desists cite additional concerns, including advertising to individuals on the state’s Voluntary Self-Exclusion List, marketing on college campuses, and permitting under-21s to place wagers.
The DCP also ordered the companies to return any funds held by Connecticut customers.
It warned that failure to comply could lead to civil penalties under the Connecticut Unfair Trade Practices Act or potential criminal enforcement under state gaming laws.
Shortly after receiving the directive, Kalshi challenged the order in federal court.
The company filed suit against the DCP, arguing that state enforcement efforts targeting sports-related event contracts are preempted by the Commodity Exchange Act.
Kalshi told the court it plans to seek an emergency temporary restraining order and a preliminary injunction.