Connecticut Issues Cease-and-Desist Orders to Nine Prediction Market Platforms Over Sports Contracts

Connecticut regulators moved in September 2026 to block nine prediction market companies from offering sports event contracts to state residents, issuing cease-and-desist orders that require immediate cessation of advertising, promotion, and contract availability while directing platforms to facilitate customer fund withdrawals. The Connecticut Department of Consumer Protection led the action against Polymarket, Coinbase, Crypto.com, Robinhood, ProphetX, Novig, Webull, Gemini, and Underdog Predict, citing an August federal court ruling that classified such contracts as unlicensed gambling outside federal commodities law protections. Officials referenced ongoing enforcement patterns that began with earlier actions against Kalshi, and they highlighted consumer protection concerns for young people and individuals with gambling vulnerabilities. State-licensed sportsbooks including DraftKings, FanDuel, and Fanatics continue to operate under existing regulatory frameworks.

Details of the Enforcement Action

The orders specify that the nine companies must halt all activities related to sports event contracts for Connecticut users, and they must provide clear mechanisms for residents to access and remove any remaining balances without delay. Regulators framed the move as an extension of prior oversight, building directly on the federal court decision that rejected commodity status for these particular contracts. Data from state records shows consistent monitoring of prediction market platforms since the Kalshi litigation, with officials noting that similar products carry exposure risks for underage users and those managing gambling-related challenges. The action aligns with broader state efforts to channel sports wagering through licensed operators that meet Connecticut standards for age verification, responsible gaming tools, and revenue reporting.

Legal Background and Federal Ruling

An August federal court decision established that sports event contracts offered by prediction markets constitute illegal gambling when conducted without state licensing, removing any shield previously claimed under federal commodities regulations. Connecticut officials referenced this ruling as the foundation for the current orders, explaining that platforms cannot rely on commodity classifications to bypass state oversight. The Department of Consumer Protection coordinated the notices across multiple companies simultaneously, ensuring uniform application of the prohibition. Observers note that the timeline follows the Kalshi lawsuit and reflects a pattern of sequential enforcement steps that began at the federal level before moving to state implementation. Companies received instructions to stop all promotional activities targeting Connecticut residents, including digital advertising and user onboarding that involves sports contracts.

Companies Named in the Orders

The list includes Polymarket along with major platforms such as Coinbase, Crypto.com, Robinhood, ProphetX, Novig, Webull, Gemini, and Underdog Predict, each directed to cease operations involving sports event contracts within the state. Regulators required these entities to confirm compliance through documented responses, and they emphasized that withdrawal functions must remain accessible to affected customers. State records indicate that several of the named companies had previously offered contracts tied to sports outcomes, which now fall under the unlicensed gambling designation established by the federal court. The coordinated issuance of orders reflects the department's approach to addressing multiple platforms at once rather than pursuing isolated cases.

Consumer Protection Measures and Licensed Alternatives

State officials cited specific risks to young people and individuals experiencing gambling difficulties as central reasons for the enforcement, pointing to the absence of mandated responsible gaming features on the targeted platforms. Connecticut maintains a system of licensed sportsbooks that include DraftKings, FanDuel, and Fanatics, all of which operate under requirements for player verification, deposit limits, and self-exclusion programs. The Department of Consumer Protection noted that these licensed operators provide the regulated pathway for sports wagering, and the cease-and-desist orders aim to redirect activity toward those established channels. Data collected by state agencies shows that licensed platforms report usage statistics and maintain age gates that align with Connecticut law, whereas the prediction market contracts lacked equivalent controls prior to the federal ruling.

Implementation and Compliance Expectations

Platforms must respond to the orders by confirming that sports event contracts are no longer available to Connecticut addresses, and they must outline steps taken to process withdrawal requests from existing users. The Department of Consumer Protection retains authority to monitor ongoing compliance and to address any continued promotion that reaches state residents through digital channels. Officials referenced the August federal decision as the legal trigger that clarified the status of these contracts, allowing state action to proceed without conflict over commodity classifications. The September 2026 timing of the orders coincides with a press release from Governor Lamont announcing coordinated steps against unauthorized sports wagering products.

Broader Regulatory Context

Connecticut's approach integrates the federal court outcome with existing state statutes that govern gambling activities, creating a unified front that distinguishes licensed sportsbooks from unregulated prediction market offerings. The nine companies now face uniform restrictions that prevent further expansion of sports contracts to Connecticut users, while the state continues to support its regulated market participants. Records from the Department of Consumer Protection document the sequence of events that began with the Kalshi case and progressed through the August ruling to the current round of cease-and-desist notices. This structure ensures that enforcement remains consistent across platforms that previously operated under different legal interpretations.