Connecticut state regulators have taken formal enforcement action against three prominent trading platforms, ordering them to halt the offering of what they deem to be unlicensed gambling products. The Connecticut Department of Banking issued cease-and-desist letters to Kalshi, Robinhood Markets, and Crypto.com, alleging the firms illegally provided state residents with access to event-based contracts tied to sports outcomes.
The regulatory action centers on the classification of these prediction market and event contract offerings. State authorities assert that such products constitute illegal online gambling under Connecticut law, as the platforms are not licensed as gaming operators within the state. The letters demand the immediate cessation of offering these contracts to Connecticut users.
This move highlights the ongoing regulatory scrutiny facing fintech and crypto platforms that operate in gray areas between financial trading, prediction markets, and gambling. Connecticut’s stringent stance signals a clear boundary for operators seeking to offer event-based wagering products without explicit state authorization. The involved companies now face a decision to either contest the state’s legal interpretation or comply and restrict access for their users in Connecticut.
