Connecticut Orders Nine Prediction Markets to Stop Sports Wagers

Connecticut has ordered nine prediction-market platforms to stop offering sports wagers to state residents, opening a new front in a dispute over whether these products are financial contracts or unlicensed gambling.

The Connecticut Department of Consumer Protection announced the enforcement action on September 10, 2026. It issued cease-and-desist orders to Polymarket, Coinbase, Crypto.com, Robinhood, ProphetX, Novig, Webull, Gemini and Underdog Predict.

The state also issued nearly 30 subpoenas as it investigates how sports contracts are marketed, funded, verified and distributed to Connecticut customers. The action could matter beyond Connecticut because regulators, sports leagues and prediction-market operators are still contesting who should oversee these products and what safeguards should apply.

What Connecticut ordered

The cease-and-desist orders direct the nine platforms to stop advertising, promoting, offering or otherwise making available sports event contracts or other unlicensed online gambling to Connecticut residents.

The state release also says the Department of Consumer Protection ordered platforms to allow Connecticut residents to withdraw funds held on their accounts. Because the release refers to “all three platforms” while naming nine cease-and-desist recipients, affected users should check the specific order or notice connected to their account rather than assume that every platform is covered by identical withdrawal language.

Prediction markets generally describe themselves as exchanges where users buy and sell yes-or-no contracts tied to future events. Connecticut officials say sports contracts that track winners, spreads, scores, rankings or player statistics function as sports wagers and therefore require a state gaming license. The platforms and their supporters characterize the products as financial or event contracts rather than conventional sportsbook bets.

Consumer and college-sports concerns

Connecticut alleges that prediction markets may accept wagers from people under the state’s legal betting age of 21 and from people enrolled in its voluntary self-exclusion program. Those are the state’s allegations, not adjudicated findings against every platform named in the orders.

Officials also object to contracts involving Connecticut collegiate sports. State law restricts such wagers, in part to protect college athletes from influence and harassment.

The subpoenas went to gaming-service licensees, payment and identity-verification companies, sports-data firms, app stores, payment services and media organizations. The state said subpoena recipients are not themselves under investigation; they may possess information relevant to the inquiry.

The legal fight over Kalshi

The September action follows Connecticut’s August 26 lawsuit against Kalshi, a major prediction-market operator. The state is seeking to block what it calls unlicensed sports betting.

Kalshi has argued that its contracts are swaps regulated by the federal Commodity Futures Trading Commission and that federal law prevents Connecticut from applying its gambling rules. Connecticut disputes that position. According to the state’s Attorney General, U.S. District Judge Vernon Oliver denied Kalshi’s request for a preliminary injunction against enforcement of Connecticut law, and Kalshi has appealed that decision to the U.S. Court of Appeals for the Second Circuit.

That procedural posture matters: the dispute remains active, and the ruling does not establish a nationwide ban or settle every question involving prediction markets and sports contracts.

Federal rules are still proposed

The CFTC is separately considering a proposed framework for event contracts involving activities listed in the Commodity Exchange Act, including gaming or conduct that may be unlawful under federal or state law.

The proposal would create a process for reviewing certain contracts and deciding whether they are contrary to the public interest. It remains a proposal, not a final federal rule, and it has not resolved the state-versus-federal jurisdiction fight.

The CFTC has also begun developing information-sharing relationships with professional sports organizations. Its memorandum with the National Hockey League calls for coordination and confidential information sharing related to professional hockey and event contracts offered on CFTC-regulated exchanges. That arrangement illustrates why suspicious trading, insider information and data access are central to the sports-integrity debate.

What happens next

Connecticut residents using one of the affected platforms should review any notice or order affecting their account and follow the state’s instructions about stopping trades and withdrawing available funds. The Kalshi litigation, any appeals and the CFTC’s rulemaking will help determine whether states can regulate sports prediction markets as gambling or whether federal commodities oversight controls.

For now, Connecticut’s action applies to the state’s enforcement effort. It does not create a nationwide ban, and no final federal rule has been issued based on the case. Connecticut residents seeking help with gambling concerns can call the state’s confidential Problem Gambling Helpline at 1-888-789-7777.

Sources

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