Hassan Maishera
TL;DR
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Kalshi, Robinhood, and Crypto.com have been ordered to cease sports betting in the State of Connecticut.
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The state accused the companies of running unlicensed sports betting via contract markets.
Kalshi, Robinhood, and Crypto.com to Cease Operations in Connecticut
The state of Connecticut has issued a cease-and-desist order against Robinhood, Kalshi, and Crypto.com as it looks to fight against sports event contracts.
According to the orders sent to the companies on Wednesday, the state's Department of Consumer Protection accused them of conducting unlicensed online gambling, more specifically, sports wagering.
“Each of the companies are hereby ordered to immediately cease and desist advertising, offering, promoting, or otherwise making available Contracts or any other form of unlicensed online gambling to Connecticut residents," the notices added.
However, Robinhood argued that it is regulated by the Federal government. In a statement issued by the company’s spokesperson, Robinhood stated that,
"As we've previously shared, Robinhood’s event contracts are federally regulated by the CFTC and offered through Robinhood Derivatives, LLC, a CFTC-registered entity, allowing retail customers to access prediction markets in a safe, compliant, and regulated manner."
Jack Such, a Kalshi spokesperson, added that,
"As other courts have recognized, Kalshi is a regulated, nationwide exchange for real-world events, and it is subject to exclusive federal jurisdiction. It's very different from what state-regulated sportsbooks and casinos offer their customers. We are confident in our legal arguments and have filed suit in federal court."
While explaining the notices, Connecticut DCP Commissioner Bryan T. Cafferelli noted that none of the entities possess a license to offer wagering in our state, and even if they did, their contracts violate numerous other state laws and policies, including offering wagers to individuals under the age of 21.
The official identified three companies as having eligibility to offer sports wagering in the state: DraftKings (via Foxwoods), FanDuel (Mohegan Sun), and Fanatics (Connecticut Lottery).
The state added that failure to cease and desist could result in civil or criminal penalties for the companies.
