Connecticut Cracks Down on Three Major Platforms: Your Sports Contracts Are Unlicensed Gambling

[BlockBeats] Connecticut is getting serious this time. On December 4, the state’s Department of Consumer Protection issued a final ultimatum to three platforms—Robinhood, Kalshi, and Crypto.com.

The reason is straightforward: the sports event contracts you’re offering are essentially disguised gambling, and you don’t have a license. The state government’s wording is tough, demanding these companies “immediately cease promoting or offering any form of unlicensed online gambling products to residents of this state.” No matter how you package it as a contract, just don’t play these games here.

Robinhood responded right away, playing the federal regulation card—implying that they’re governed by the federal government, so state-level agencies have no jurisdiction.

This situation is quite interesting. Prediction markets have become increasingly popular in the US in recent years, operating under the banner of “financial derivatives” to enable sports outcome betting. But states have vastly different attitudes toward this: some turn a blind eye, while others have zero tolerance. Connecticut is clearly in the latter camp this time, and they’re acting quickly and decisively.

We’ll have to see how these companies respond next. Will they compromise and exit the Connecticut market, or will they go to court and fight it out? Either way, the prediction market waters are only getting murkier.