Connecticut Cracks Down on 3 Prediction Markets as State–Federal Fight Escalates
Connecticut ordered Kalshi, Robinhood, and Crypto.com to halt event-based contracts, citing unlicensed sports betting violations.Summary
Connecticut's Department of Consumer Protection (DCP) issued cease-and-desist orders to Kalshi, Robinhood Derivatives, and Crypto.com, demanding they immediately halt event-based prediction contracts, which the state deems unlicensed online sports betting that violates numerous laws, including wagering by those under 21.
The DCP accused the platforms of failing integrity controls, advertising to self-excluded individuals, and misleading users about the legality of these contracts, asserting that a prediction market wager is not an investment. This action deepens Connecticut's restrictive stance on digital assets, contrasting with other states exploring permissive frameworks.
The conflict highlights a growing regulatory rift between state gambling laws and federal derivatives oversight, as platforms like Kalshi argue for federal jurisdiction. The outcome of this clash, including Kalshi's federal lawsuit and contrasting regulatory approvals like Polymarket's with the CFTC, will likely determine if prediction markets evolve as federally supervised financial products or remain state-regulated gambling.
(Source：BeInCrypto)