Connecticut Cracks Down on Unlicensed Sports Event Contracts
Connecticut has taken action against several major trading platforms, including Kalshi, Robinhood, and Crypto.com, after finding that their sports-related markets had crossed a legal line. The state’s Department of Consumer Protection announced a cease and desist order on December 3, 2025, citing concerns over the platforms’ lack of age verification, security standards, and consumer protection regulations.
The order specifically targets the platforms’ “sports event contracts,” which operate like unlicensed sports betting. Under Connecticut law, only licensed operators such as DraftKings, FanDuel, and Fanatics are allowed to offer sports betting, and these operators must adhere to strict rules designed to protect customers, verify age, and prevent insider activity. 
Regulatory Concerns and Company Reactions
The Connecticut Department of Consumer Protection expressed concerns that the unlicensed sports event contracts expose users to financial and personal data risks, as they are not audited by regulators and do not meet the technical standards required of licensed operators. The department also noted that some bets involve events with outcomes that may already be known to insiders, which is prohibited in Connecticut. Additionally, regulators raised concerns about bets being offered to individuals under 21 and those on the state’s voluntary self-exclusion list.
In response to the order, Kalshi quickly filed a lawsuit in federal court in Connecticut, seeking an injunction and arguing that the state’s definition of gambling is too broad. Robinhood, on the other hand, cited its CFTC-regulated structure, stating that its event contracts are offered through a registered company and provide users with access to a monitored trading environment. Crypto.com has yet to comment on the matter, but the company recently paused similar markets in Nevada following a federal court ruling.
Implications and Industry Trends
Connecticut’s move adds another legal front to the ongoing debate over prediction markets and sports-related contracts. Several other states, including New York and Massachusetts, have raised similar concerns, while recent federal rulings in Nevada and Montana have given the industry some momentum. The outcome in Connecticut could impact how prediction markets operate in the coming years, as regulators and federal agencies continue to test the line between licensed betting and state-sanctioned event trading.
As the industry awaits clarity, users in Connecticut may have to wait for further developments. In the meantime, the state’s action serves as a reminder of the importance of regulatory compliance and consumer protection in the rapidly evolving world of online trading and sports betting. For more information on this developing story, visit https://crypto.news/connecticut-kalshi-robinhood-crypto-com-sports-2025/.
