Connecticut Issues Cease-and-Desist Orders to Nine Prediction Market Platforms
Connecticut issued cease-and-desist orders to nine prediction platforms including Polymarket and Robinhood plus nearly 30 subpoenas to providers and media. The action intensifies state challenges to unlicensed event contracts amid ongoing suits against Kalshi and the CFTC. Similar litigation spreads across multiple jurisdictions.
SCCG Take — States are pressing claims that prediction markets constitute unlicensed gambling, testing CEA preemption. Operators face prolonged uncertainty until courts define permissible activity.
Connecticut regulators have escalated enforcement against unlicensed prediction markets. The Department of Consumer Protection issued cease-and-desist orders to nine platforms and nearly 30 subpoenas to gaming service providers, media outlets, and technology companies.
The orders target Polymarket, Coinbase, Crypto.com, Robinhood, ProphetX, Novig, Webull, Gemini, and Underdog Predict. Each must stop advertising, promoting, or offering sports event contracts and other unlicensed online gambling to Connecticut residents. Platforms must also allow existing customers to withdraw funds.
Officials argue the activity violates state gaming and unfair trade practices laws without a license. Cited risks include participation by those under 21, self-excluded individuals, and contracts tied to Connecticut collegiate sports.
Enforcement Extends to Enablers and Media
Subpoenas reached nine licensed gaming service providers, including PayPal, Plaid, LexisNexis, Sportradar Solutions, Paysafecard, Genius Sports Media, Genius Tech International, Integrity Compliance 360, and Socure. 15 media organizations received subpoenas, among them ESPN, Hearst Connecticut Media, The Hartford Courant, NBC Connecticut, and iHeartMedia. Additional subpoenas went to Apple App Store, Google Play, Apple Pay, Google Wallet, and Stripe. The Department stressed that recipients are not under investigation.
These steps deepen Connecticut’s conflict with the sector. The state continues its lawsuit against Kalshi after a federal judge denied the exchange’s preliminary injunction request in August. Separate litigation proceeds against the Commodity Futures Trading Commission and Coinbase.
Widening State-Federal Legal Conflicts
Parallel disputes are advancing elsewhere. In Iowa, a federal judge denied Kalshi’s request for a preliminary injunction, finding the exchange unlikely to succeed on its claim that the Commodity Exchange Act preempts state gambling laws. The Tenth Circuit denied Kalshi’s emergency request for an injunction pending appeal in Utah. Underdog sued regulators in Massachusetts, Ohio, Wisconsin, New Mexico, and Washington on similar preemption grounds. In Michigan, Robinhood agreed to stop offering new sports-related event contracts and wind down remaining positions.
According to Gambling Insider, commercial activity continues alongside the litigation, with new partnerships and celebrity endorsements. The pattern of state enforcement against a claimed federal overlay leaves operators facing fragmented compliance demands and extended court battles. Clearer boundaries between commodity contracts and state gambling authority remain unresolved.
Reporting: Gambling Insider
Generated by SCCG’s automated editorial system from published source reporting. SCCG Management holds editorial responsibility.
States are testing prediction markets as unlicensed gambling, and platforms face a patchwork of enforcement until courts settle preemption.
We've watched prediction markets scale without clear regulatory consensus. Connecticut's move — enforcement plus subpoenas to service providers and media — signals coordinated state pushback that will force platforms to treat this like gambling licensure, not fintech innovation. Preemption battles will take years, and operators need compliance strategy now.
- Nine platforms ordered to cease operations in Connecticut; 30 subpoenas issued to service providers and media
- State argues unlicensed gambling; platforms claim federal CEA preemption — courts so far siding with states
- Similar enforcement spreading: Iowa, Utah, Massachusetts, Ohio, Wisconsin, New Mexico, Washington all active
SCCG angle: SCCG works with platforms navigating multi-state licensing and regulators managing novel product categories. We connect operators to compliance counsel, state agency relationships, and technology partners who understand the difference between event contracts and sports betting — critical as this patchwork hardens into precedent.
Gaming, betting and prediction markets — the desk’s read, every weekday.
Subscribe →