Connecticut Cracks Down on 3 Prediction Markets as State–Federal Fight Escalates
Connecticut has ordered Kalshi, Robinhood, and Crypto.com to halt event-based contracts instantly, deepening its aggressive stance in opposition to digital property.
The choice exposes a widening regulatory rift between state playing legal guidelines and federal derivatives oversight.
A New Flashpoint in Connecticut’s Anti-Crypto Campaign
Connecticut has issued cease-and-desist orders to Kalshi, Robinhood Derivatives, and Crypto.com, accusing them of working unlicensed on-line sports activities betting by means of event-based prediction contracts.
The Department of Consumer Protection (DCP) claims the platforms violated state gaming legal guidelines and put customers in danger.
The transfer arrives 5 months after Governor Ned Lamont signed a invoice banning all state-level Bitcoin investments, cementing Connecticut as one of many least crypto-friendly jurisdictions within the US.
While states like Texas, Arizona, and New Hampshire discover Bitcoin reserves and permissive digital-asset frameworks, (*3*).
Why the State Says Prediction Markets Are “Illegal Sports Betting”
In its December 3 press launch, the DCP stated not one of the three platforms holds a license to supply wagering within the state.
“…their contracts violate quite a few different state legal guidelines and insurance policies, together with providing wagers to people underneath the age of 21,” read an excerpt within the press launch.
Regulators accuse the platforms of:
- Advertising to folks on the voluntary self-exclusion listing
- Failing to implement integrity controls
- Allowing wagers on occasions with recognized outcomes
- Operating exterior any consumer-protection framework
- Misleading customers into believing the markets are authorized investments
“A prediction market wager will not be an funding,” stated DCP Gaming Director Kris Gilman.
Against this backdrop, the DCP urges the platforms to stop all sports-event contracts and permit Connecticut residents to withdraw funds.
While each Robinhood and Kalshi push again, citing federal oversight, solely the latter has filed a federal lawsuit difficult Connecticut’s authority.
Nonetheless, this conflict highlights a rising authorized fault line between state playing legal guidelines and federal derivatives regulation.
“Unfortunate drama. The battle between state playing legal guidelines and federal derivatives oversight proves regulatory incoherence,” one consumer on X (Twitter) remarked.
A Multi-State Wave of Battles Is Forming
Connecticut will not be alone. New York is embroiled in its personal authorized dispute with Kalshi. At the identical time, a latest Nevada ruling asserted that state regulators might management sports-based occasion contracts, undermining the business’s argument for unique federal oversight.
At the identical time, the regulatory setting is altering: Polymarket has gained CFTC approval and expanded to greater than 20 states, marking a stark distinction with Connecticut’s shutdown orders.
What This Means for Crypto Markets and Prediction Platforms
The crackdown intensifies Connecticut’s divergence from national crypto trends and heightens uncertainty across the authorized standing of event-based contracts.
With a number of states asserting authority, prediction markets face an advanced and fragmented US regulatory market.
More lawsuits are possible, and the end result might decide whether or not prediction markets develop into federally supervised monetary merchandise or get handled as state-regulated playing.
The subsequent milestone will likely be Kalshi’s federal problem and whether or not extra states facet with Connecticut or observe the Polymarket-plus-CFTC mannequin.
The publish Connecticut Cracks Down on 3 Prediction Markets as State–Federal Fight Escalates appeared first on BeInCrypto.
