Connecticut Halts Unlicensed Bets by Kalshi, Robinhood, Crypto.com

Connecticut’s Department of Consumer Protection has issued a cease-and-desist order against Kalshi, Robinhood, and Crypto.com. The order alleges that these companies offer unlicensed online sports wagering contracts violating state laws.

Kalshi, Robinhood, and Crypto.com are among the tech and financial firms affected. These orders stem from state regulations mandating licensing to operate sports betting in Connecticut, which these platforms allegedly lack.

The immediate impact involves a halt in offering event contracts linked to cryptocurrencies within Connecticut. Regulatory actions from Connecticut highlight the growing scrutiny by state authorities on platforms without state-specific licensing.

Robinhood has affirmed its contracts are regulated by the Commodity Futures Trading Commission (CFTC). Baiju Bhatt, CEO of Robinhood, stated, “Our event contracts are regulated by the Commodity Futures Trading Commission, and we operate under CFTC oversight. We believe our platform complies with all applicable federal standards.” The situation showcases the constant tension between federal oversight and state law compliance, impacting fintech expansion plans.

Implications include potential financial adjustments and strategic shifts for affected firms. The scrutiny reflects increased regulatory challenges faced by platforms bridging fintech solutions with event-based betting.

Looking forward, this could lead to changes in how these firms approach state-specific licensing, potentially influencing broader sector strategies. Historical trends of regulatory enforcement indicate possible future crackdowns in other jurisdictions.