State-licensed operators, offshore bookmakers, and a prediction-market alliance are competing for the same customers. Crypto businesses see potential partners on every side—provided the business survives the legal argument.
On September 8, Robinhood announced a football expansion with Crypto.com, routing selected event contracts through its exchange infrastructure. Two days later, Connecticut announced cease-and-desist orders against nine prediction-market companies, including both businesses, alleging unlicensed gambling.
A product launch followed by a regulatory challenge. Welcome to football season.
Robinhood reported 13.6 billion event contracts traded in the second quarter of 2026. That is a contract count, not dollars wagered. Nevertheless, it illustrates why the jurisdictional fight is becoming a business-model question rather than something buried in the terms and conditions.
Crypto’s opportunity lies between the competing models. Its problem is that serving several sides means navigating several sets of legal risks.
The Old Divide Has a New Challenger
OddsTrader’s comparison of offshore vs. regulated sportsbooks explains the original distinction: U.S. state oversight versus operators outside that licensing system, with different payment options and avenues for complaints. A foreign license does not substitute for state authorization.
That older fight has not disappeared. In its September 9 enforcement update, Tennessee reported that nine unlicensed operators had left the state under its campaign. Those are meaningful local results, not evidence of a nationwide offshore surrender.
Now the challenger has allies. PrizePicks launched Kalshi event contracts in November 2025, while the Coalition for Prediction Markets brought together Kalshi, Underdog, Robinhood, Coinbase, and Crypto.com.
These are commercial alliances. Daily fantasy contests, exchange contracts, and sportsbook wagers remain distinct products with different legal arguments. The companies can cooperate without making those differences disappear.
A Courtroom Fight, Not a Branding Exercise
States argue that sports contracts are wagers subject to gambling law. The Commodity Futures Trading Commission is defending its own jurisdiction, including through lawsuits against Arizona, Connecticut, and Illinois.
The question is whether federal derivatives law displaces state gambling law for these products. It is considerably more complicated than deciding which department gets to print the license.
The Third Circuit upheld preliminary protection for Kalshi against New Jersey enforcement. On August 28, the Ninth Circuit upheld the removal of similar protection against Nevada enforcement.
Katten partner Carl Kennedy and his coauthors emphasize in their analysis of the conflicting decisions that “both decisions arise from preliminary-injunction proceedings, not final merits judgments.” Nobody should be engraving the trophy yet.
As The Coin Republic reported in its coverage of New Jersey’s Supreme Court petition, the state requested review on September 2. Asking for a review is not securing a ruling.
Manatt lawyers Ivor C. Wolk and Tom Feigenbaum identify the commercial stakes in their assessment of the Ninth Circuit decision: “Operators could face state-by-state licensing, product-classification, and enforcement risk.” Their warning concerns what could follow if state gambling requirements prevail. For businesses pursuing national access, that would be an expensive return to geography.
Crypto Has Already Found a Side Entrance
The alliances become more interesting when familiar betting brands cross the supposed battle lines.
DraftKings’ February agreement with Crypto.com expanded event contracts on DraftKings Predictions. That is a crypto company supplying exchange infrastructure to an established betting brand—not evidence that cryptocurrency deposits have been authorized across DraftKings’ state-licensed sportsbooks.
This is where the three-camp picture needs qualification. An established operator can maintain its sportsbook business while building a prediction product. Corporate loyalties become flexible when another revenue opportunity appears.
Crypto companies and cryptocurrency payments are different things. An exchange partnership need not put Bitcoin in the customer’s wallet.
Stablecoins present another possible route. In The Coin Republic’s interview on stablecoin payments and financial infrastructure, WeFi co-founder Maksym Sakharov argued that their earliest important uses would emerge in business transactions and settlement, rather than necessarily at consumer checkouts.
Applied to betting, that suggests a quieter opportunity: supplying permitted payment and settlement services behind an otherwise familiar product. That is an inference about potential demand, not evidence that state-licensed sportsbooks have broadly adopted stablecoins.
The work would involve conversion, accounting, and compliance—not persuading every football fan to become a blockchain enthusiast before kickoff.
Stablecoins Do Not Carry Diplomatic Immunity
There is a catch for anyone imagining a neutral payment system available to every participant without interference.
Circle’s USDC terms describe address-blocking and freezing powers, including action in response to valid legal orders. They also make clear that a third-party platform’s acceptance of USDC does not establish Circle’s endorsement. These are issuer-specific conditions, not universal properties of every cryptocurrency.
A token logo in the cashier is not an alliance announcement.
The dispute is also reaching the supporting businesses. Connecticut’s September action sought information from payment providers and app stores. The state explicitly said subpoena recipients were not under investigation, but the requests demonstrate how a platform’s regulatory dispute can extend beyond the platform itself.
For readers researching the best offshore sportsbooks according to OddsTrader, cryptocurrency support belongs alongside withdrawal conditions, operating history, and available complaint procedures. Payment convenience cannot establish local authorization or guarantee recovery of a disputed balance.
That distinction matters commercially, too. Exchange infrastructure, payment processing, and accepting a wager require separate scrutiny.
Crypto’s credible opportunity is to become useful across competing models wherever the rules permit. The betting businesses want to win the jurisdictional argument. Crypto businesses would quite like to earn money by helping the transactions happen.
Potentially a fine arrangement. The legal department would like a word first.
