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Connecticut regulators have ordered nine prediction-market operators to stop offering sports-related contracts in the state, sharply expanding an enforcement campaign that has become part of a broader fight over whether increasingly popular event contracts belong in financial markets or should be treated as gambling.
The Department of Consumer Protection targeted Polymarket, Coinbase, Crypto.com, Robinhood, ProphetX, Novig, Webull, Gemini and Underdog Predict with cease-and-desist orders this week. The companies were directed to stop advertising, promoting or making sports event contracts and other forms of what the state considers unlicensed online gambling available to Connecticut residents.
Regulators also instructed the affected platforms to allow Connecticut customers to withdraw money held in their accounts.
Subpoenas Reach Beyond Prediction-Market Operators
The move reaches well beyond the nine platforms.
State investigators have also issued nearly 30 subpoenas as they examine how prediction markets reach Connecticut consumers and the infrastructure supporting them. The demands extend to gaming-service companies, payment and technology businesses, app platforms and news organizations.
Connecticut has stressed that receiving a subpoena does not mean a company is itself under investigation. Regulators are seeking information they believe could help establish how the prediction-market business operates inside the state.
Among the businesses and organizations receiving subpoenas were PayPal, Plaid, Sportradar Solutions, Genius Sports-related entities and Socure, along with Apple and Google services and Stripe. Media organizations including ESPN, the Hartford Courant, Hearst Connecticut Media Group and several television and radio companies were also sent demands for information.
The Fight Over Whether a Trade Is Really a Bet
Behind the enforcement action is a jurisdictional dispute that has been building for months.
Prediction markets generally allow customers to buy and sell contracts tied to whether a particular event will happen. When those contracts concern sporting events — the winner of a game, a point spread, a player’s performance or another measurable outcome — Connecticut considers the transaction functionally equivalent to placing a sports wager.
The industry has pursued a different legal framework. Some operators conduct business through federally regulated derivatives infrastructure and maintain that event contracts fall under federal commodities law rather than individual state gambling regimes.
That distinction carries substantial consequences.
A contract treated as a federally regulated financial product can potentially be offered under a very different system from a sportsbook that must obtain state approval, follow local wagering restrictions and comply with gambling-specific consumer protections.
Connecticut has placed itself firmly on the state-regulation side of that divide.
Kalshi Battle Set the Stage
The state’s earlier confrontation focused on Kalshi, Crypto.com and Robinhood. In December 2025, regulators ordered the three businesses to stop what Connecticut characterized as unlicensed sports wagering.
Kalshi subsequently went to federal court, arguing that its contracts were subject to federal commodities regulation and that Connecticut could not enforce its gambling laws against them.
That strategy suffered a significant setback when a federal judge rejected Kalshi’s attempt to prevent Connecticut from enforcing its laws. The company appealed.
Connecticut subsequently filed its own case seeking to block Kalshi’s sports contracts, while the Commodity Futures Trading Commission has separately challenged Connecticut and other states over their efforts to regulate the market.
The latest orders show that Connecticut is no longer treating the controversy as a dispute involving only a handful of pioneering platforms. Its enforcement net now covers recognizable cryptocurrency and retail-investing brands alongside companies built more specifically around prediction markets.
Connecticut Points to Consumer Protections
State officials contend that the difference between the two regulatory systems is particularly important for consumers.
Connecticut’s licensed sportsbooks operate under technical, financial and integrity requirements covering customer funds, personal information, suspicious betting and other safeguards. Regulators maintain that prediction-market operators offering sports contracts do not comply with that state system.
Officials have also accused some prediction platforms of making sports contracts accessible under conditions that would be prohibited for licensed sportsbooks, including participation by people below Connecticut’s minimum sports-betting age.
The state says some operators have marketed to people enrolled in gambling self-exclusion programs and have offered contracts involving Connecticut college sports, an area subject to specific state restrictions.
Connecticut permits sports wagering through three licensed arrangements: DraftKings in connection with Foxwoods, FanDuel through Mohegan Sun and Fanatics through the Connecticut Lottery. Sports-wagering participants must be at least 21, while fantasy contests have a minimum age of 18.
Prediction Markets Are Still Expanding
Connecticut’s campaign arrives as prediction markets push deeper into mainstream financial platforms rather than retreating from the regulatory fight.
Robinhood this week announced an expanded prediction-market arrangement involving OG.com and Crypto.com, including plans to route some football event contracts through OG.com’s federally regulated exchange. Robinhood is also taking equity interests in OG.com and Crypto.com.
That expansion illustrates why the Connecticut dispute matters beyond the state’s borders.
Prediction markets increasingly sit at the intersection of two regulatory systems designed for different industries. States traditionally exercise broad authority over gambling, while federally regulated derivatives exchanges operate under commodities law.
Sports contracts have made that collision difficult to ignore.
A Regulatory Fight With National Consequences
For Connecticut, the position is straightforward enough to justify enforcement: changing the vocabulary from betting to trading does not alter the underlying transaction when money is placed on the outcome of a sporting event.
For prediction-market companies, accepting that position could dismantle much of the advantage of operating through a federal market structure. They could instead face a patchwork of state licensing requirements, restrictions and outright prohibitions.
Connecticut’s latest action therefore does more than add nine names to an enforcement list. It widens a legal confrontation over who gets to regulate a fast-growing market — and whether a wager stops being a wager simply because it is packaged as a financial contract.
Source: portal.ct.gov
