Connecticut orders Robinhood, Crypto.com, Kalshi to stop prediction markets

The Connecticut Department of Consumer Protection (DCP) issued cease and desist orders to Robinhood, Crypto.com, and Kalshi, asserting they were conducting unlicensed online gambling, specifically sports wagering, through event contracts. DCP Commissioner Bryan Cafferelli stated that these entities lack necessary state licenses and that their contracts violate laws, including allowing wagers from individuals under 21. DCP Gaming Director Kris Gilman warned that these platforms operate outside state regulation, posing risks to consumers whose funds and data lack protection. Kalshi responded by filing a lawsuit in federal court, arguing that Connecticut's regulation intrudes upon the exclusive federal jurisdiction established by Congress for regulating derivatives on designated exchanges, claiming its sports event contracts are lawful under federal law overseen by the Commodity Futures Trading Commission (CFTC). Connecticut noted that licensed operators like DraftKings and FanDuel require users to be 21, and cited concerns about prediction markets lacking security standards, integrity controls against insider betting, and oversight of payout rules. Kalshi is facing similar regulatory scrutiny in numerous other states, including New York and Massachusetts.

(Source：Cointelegraph)