On December 3, 2025, the Connecticut Department of Consumer Protection (DCP) Gaming Division issued cease-and-desist orders to KalshiEX, Robinhood Derivatives, and Crypto.com, directing them to halt their sports event contract offerings in the state. This decisive action underscores Connecticut’s stringent stance on unlicensed sports betting, as the state aims to protect consumers from unauthorized and potentially risky gambling activities.
In the cease-and-desist letters, the DCP warned these platforms of severe consequences for non-compliance, including civil penalties under the Connecticut Unfair Trade Practices Act and potential criminal charges due to violations of the state’s gaming laws. The department emphasized that offering sports event contracts without a proper license is illegal and endangers consumer finances and private information.
The DCP’s decision is part of a broader effort to ensure that all gambling activities in Connecticut are conducted within a regulated framework. Commissioner Bryan T. Cafferelli stressed that only licensed entities can legally offer sports wagering in the state. Neither KalshiEX, Robinhood Derivatives, nor Crypto.com hold such licenses, rendering their operations unlawful. Furthermore, Cafferelli noted that these platforms’ contracts violate additional state laws, such as making wagers available to individuals under the age of 21, which is strictly prohibited.
The move by Connecticut’s DCP reflects a larger trend in the United States, where state governments are increasingly vigilant about regulating online gambling. With the rise of digital platforms, ensuring consumer protection has become a top priority. This is especially critical as more states begin to legalize various forms of online wagering, which has seen significant growth since the U.S. Supreme Court allowed states to regulate sports betting independently in 2018.
Kris Gilman, the DCP Gaming Director, highlighted another major concern: the deceptive advertising practices of these platforms. By promoting their services as legal, these companies mislead consumers, who might not realize they are engaging in unprotected and illegal gambling activities. Gilman pointed out that prediction market wagers are often misconstrued as investments, yet they lack the safeguards typically associated with financial investments. This confusion can lead to considerable financial loss and jeopardize personal information.
In Connecticut, the sports betting market is currently dominated by three licensed providers: DraftKings, FanDuel, and Fanatics. Each of these entities operates under strict regulations, ensuring consumer safety and adherence to state laws. DraftKings collaborates with Foxwoods, FanDuel partners with Mohegan Sun, and Fanatics operates in conjunction with the Connecticut Lottery. These partnerships testify to a structured and regulated gambling industry within the state.
The state’s aggressive enforcement of gaming laws raises questions about the future of online platforms like KalshiEX, Robinhood Derivatives, and Crypto.com. While these companies have made significant strides in financial services, their foray into sports betting without proper authorization poses a significant risk. They must either seek the necessary licenses or face the consequences of operating unlawfully in Connecticut.
This crackdown also highlights a notable risk associated with over-regulation: driving sports bettors to unregulated, offshore markets that lack consumer protections. In efforts to shield residents from harm, stringent state policies may inadvertently push some consumers toward riskier betting environments. Balancing regulation with accessibility remains a challenge for states aiming to foster a safe and fair gambling ecosystem.
Historically, gambling in Connecticut has been closely associated with tribal operations, with major players like the Mashantucket Pequot and Mohegan tribes at the forefront. These tribes have long-standing agreements with the state to manage casino operations, and their involvement in online sports betting is an extension of these established partnerships. The modern landscape of online betting, however, introduces new players and challenges that require updated regulatory frameworks to accommodate technological advancements while maintaining consumer protection.
As the gambling industry continues to evolve with technology, regulators must stay ahead of trends to protect consumers and ensure fair play. The DCP’s actions in Connecticut serve as a reminder that while innovation is welcomed, it must not come at the expense of legal compliance and consumer safety. The challenge lies in creating a regulatory environment that fosters growth and innovation while preventing potential abuses and protecting consumers from financial harm.
In conclusion, Connecticut’s recent orders against KalshiEX, Robinhood Derivatives, and Crypto.com emphasize the importance of regulatory compliance in the rapidly growing online gambling market. As states navigate the complexities of legalizing and regulating betting, they must balance innovation with the necessary safeguards to protect consumers. This case serves as a precedent for other jurisdictions grappling with similar issues, highlighting the ongoing need for comprehensive and adaptable gaming regulations.
Garry Sputnim is a seasoned journalist and storyteller with over a decade of experience in the trenches of global news. With a keen eye for uncovering stories that resonate, Alex has reported from over 30 countries, bringing light to untold narratives and the human faces behind the headlines. Specializing in investigative journalism, Garry has a knack for technology and social justice issues, weaving compelling narratives that bridge tech and humanity. Outside the newsroom, Garry is an avid rock climber and podcast host, exploring stories of resilience and innovation.
