Connecticut hits KalshiEX LLC, Robinhood Derivatives, LLC and Crypto.com with cease-and-desist orders

(PRESS RELEASE) -- The Department of Consumer Protection Gaming Division issued cease-and-desist orders to three platforms conducting unlicensed online gambling, specifically sports wagering.

Letters were sent to KalshiEX LLC, Robinhood Derivatives, LLC and Crypto.com.

“Only licensed entities may offer sports wagering in the state of Connecticut,” said DCP Commissioner Bryan T. Cafferelli. “None of these 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.”

“These platforms are deceptively advertising that their services are legal, but our laws are clear,” said DCP Gaming Director Kris Gilman. “They are also operating outside of a regulatory environment, posing a serious risk to consumers who may not realize wagers placed on these illegal platforms offer no protections for their money or information. A prediction market wager is not an investment.”

Prediction Market Platforms offering “Sports Events Contracts” are illegal and put consumers money and information at risk:

- They are not required to adhere to Connecticut’s technical standards for wagering platforms, leaving your financial and personal information vulnerable.
- There are no integrity controls in place for these platforms. That means there is nothing to prevent participants or insiders from placing wagers on events or impacting the outcome of an event. Regulated operators are required to have controls in place to prohibit known insiders from placing wagers, and to monitor and report suspicious wagers.
- House rules, which govern the settlements of all wagers, are not reviewed by any regulator. Wagers offered on these platforms are not regulated, which means you might not get your winnings as advertised.
- If an issue arises, such as a wager not paying out as advertised, there is no recourse for the Department of Consumer Protection to recover lost funds for consumers.
- These platforms offer wagers on events where the outcome is known by many people, such as award shows, professional team trades, and other events. This means insiders with special knowledge of an event can place bets on the outcome they already know. Wagers on events with known outcomes are prohibited in Connecticut because they are unfair to consumers without insider knowledge.
- These platforms advertise to individuals on the Voluntary Self-Exclusion List, and on college campuses, which is illegal in Connecticut.
- They offer wagers to individuals on the Voluntary Self-Exclusion List and to individuals under 21.

All three platforms are ordered to immediately cease and desist advertising, offering, promoting, or otherwise making available “sports event contracts” or any other form of unlicensed online gambling to Connecticut residents. DCP also ordered all three platforms to allow Connecticut residents to withdraw any funds currently held by the platforms.

Failure to comply may result in additional action including, but not limited to, civil penalties under the Connecticut Unfair Trade Practices Act and/or criminal penalties for violations of Connecticut’s gaming statutes.

In Connecticut, the three gaming platforms licensed to offer sports wagering are Draft Kings (Foxwoods), FanDuel (Mohegan Sun) and Fanatics (Connecticut Lottery). Participants must be at least 21 years old to engage in online or in-person gaming or sports wagering. For fantasy contests, participants must be at least 18 years old.

https://www.casinocitytimes.com/news/article/connecticut-hits-three-platforms-with-cease-and-desist-orders-261922