Connecticut Regulators Target Nine Prediction Market Platforms With Cease-and-Desist Orders Over Sports Contracts

Connecticut's Department of Consumer Protection has directed nine prediction market companies to halt all advertising, promotion, and offering of sports event contracts to state residents while requiring them to permit customer withdrawals. The firms named in the orders include Polymarket, Coinbase, Crypto.com, Robinhood, ProphetX, Novig, Webull, Gemini, and Underdog Predict. Officials issued the directives after an August federal court decision classified such contracts as unlicensed gambling outside federal commodities protections.

The enforcement action builds directly on earlier steps the state took against similar platforms. A prior lawsuit against Kalshi established the legal foundation, and state regulators cited ongoing concerns about consumer exposure, particularly for younger users and individuals with gambling-related vulnerabilities. At the same time the department highlighted Connecticut's existing network of licensed sportsbooks such as DraftKings, FanDuel, and Fanatics that operate under state oversight.

Federal Court Ruling Sets Stage for State Response

An August federal court ruling determined that prediction market contracts tied to sports outcomes constitute illegal unlicensed gambling rather than commodities trading protected under federal law. That decision cleared the path for state-level enforcement. Connecticut officials moved quickly once the ruling was issued, and the September 2026 orders represent the most recent application of that precedent to multiple platforms simultaneously.

Each company received instructions to stop all promotional activity directed at Connecticut residents and to facilitate fund withdrawals for any existing customers. The orders do not include additional penalties at this stage but establish clear compliance deadlines. Regulators have indicated they will monitor adherence through ongoing surveillance of platform activity and advertising channels.

Companies Named and Scope of Orders

The nine entities span a range of prediction market and trading platforms. Polymarket operates a blockchain-based market for event outcomes. Coinbase, Crypto.com, Robinhood, Webull, and Gemini maintain broader digital asset services that have included prediction-style contracts. ProphetX, Novig, and Underdog Predict focus more narrowly on sports-related event contracts. All nine must now cease offering these products to Connecticut users.

State officials noted that the platforms had continued to accept Connecticut traffic despite prior warnings in some cases. The new orders require immediate removal of targeted advertising and suspension of contract offerings. Customers retain the right to withdraw remaining balances, and the department has asked each company to confirm compliance steps within specified timeframes.

Consumer Protection Rationale and Licensed Alternatives

State statements emphasize risks to consumers, including young people and those with gambling issues, as primary drivers for the action. Officials pointed out that unlicensed platforms lack the age verification, responsible gaming tools, and financial safeguards required of Connecticut's licensed operators. The department contrasted these platforms with DraftKings, FanDuel, and Fanatics, which maintain state licenses and contribute to regulatory oversight frameworks.

Connecticut has maintained a structured approach to sports wagering since legalization. Licensed sportsbooks operate under strict rules governing advertising, user verification, and problem gambling resources. The cease-and-desist orders reinforce the distinction between these regulated entities and the prediction market platforms now facing restrictions.

Connection to Broader Enforcement Pattern

The current orders follow the earlier lawsuit against Kalshi and reflect a consistent state strategy. Governor Lamont's September 2026 announcement outlined the coordinated effort across agencies to address illegal prediction markets offering sports wagers. The press release detailed the nine new orders and reiterated the state's commitment to protecting residents from unlicensed activity. Governor Lamont Announces New Actions Against Illegal Prediction Markets Offering Sports Wagers in Connecticut

Regulators have stated they will continue to review additional platforms and advertising channels. The August federal ruling provides a legal benchmark that other states may also reference, though Connecticut's action remains focused on its own jurisdiction and residents.

Conclusion

The September 2026 cease-and-desist orders mark a significant expansion of Connecticut's enforcement against unlicensed sports prediction contracts. Nine platforms must now cease operations targeting state residents while allowing fund withdrawals. The action rests on the August federal court ruling and prior litigation involving Kalshi. Licensed operators such as DraftKings, FanDuel, and Fanatics continue to function under state regulation, and officials have linked the new measures to consumer protection priorities. Compliance monitoring will determine next steps for the affected companies.