A swift crackdown has descended upon the world of online prediction markets. Connecticut’s consumer protection agency has issued cease-and-desist orders to three prominent platforms – Kalshi, Robinhood, and Crypto.com – alleging they’ve been operating illegal sports betting services within the state.
The Department of Consumer Protection acted decisively, sending official notices that these platforms were offering sports wagering without the required licenses. This isn’t simply a matter of paperwork; it’s a direct violation of Connecticut law, designed to protect its citizens.
Commissioner Bryan T. Cafferelli emphasized a fundamental principle: only licensed entities can legally offer sports wagering in Connecticut. He stated that none of the three companies held the necessary authorization, and even if they did, their specific offerings ran afoul of multiple state regulations, including those concerning age restrictions.
The core issue revolves around consumer safety. Licensing isn’t a revenue grab; it’s a crucial framework for safeguarding financial and personal information. Without it, users are exposed to significant risk, and any promised winnings lack the backing of regulatory guarantees.
Officials are particularly concerned about deceptive advertising practices. These platforms, according to the Department, are misleadingly presenting their services as legal, despite clear legal prohibitions. This creates a dangerous environment where consumers unknowingly gamble without any recourse.
The dispute centers on whether these platforms are legitimate “prediction markets” or, in reality, unlicensed online gambling operations. This question isn’t unique to Connecticut; Kalshi has already faced similar legal challenges in Ohio and Nevada, while Robinhood and Crypto.com have encountered obstacles in Nevada as well.
Connecticut’s orders are comprehensive. The three companies are required to immediately halt all advertising, promotion, and operation of “sports event contracts” or any other form of unlicensed gambling to residents. They must also facilitate withdrawals for any Connecticut users currently holding funds on their platforms.
Failure to comply with these orders won’t be taken lightly. The Department of Consumer Protection has warned of potential civil penalties, signaling a firm commitment to enforcing the state’s gambling laws and protecting its citizens from unregulated financial risk.
