Connecticut orders nine prediction platforms to halt sports contracts

Connecticut escalated its fight with prediction markets on Sept. 10, ordering nine operators to stop advertising, promoting, offering or otherwise making available sports event contracts and other forms of unlicensed online gambling to residents of the state. The Department of Consumer Protection also said customers must be able to withdraw any funds held on the platforms.

Gov. Ned Lamont, Attorney General William Tong and Consumer Protection Commissioner Bryan Cafferelli announced the move after Connecticut sued Kalshi earlier in the month. A federal judge in Connecticut ruled in August that sports event contracts are illegal unlicensed gambling and are not protected by federal commodities law.

Reporting on the action identified the nine platforms as Polymarket, Coinbase, Crypto.com, Robinhood, ProphetX, Novig, Webull, Gemini and Underdog Predict. State officials said these contracts are sold for between 1 cent and 99 cents, depending on how likely an event is to occur, and can cover sports, elections and even military action.

Lamont said Connecticut had legalised sports betting in 2021 in a carefully designed way meant to protect young people and problem gamblers. He argued that unregulated prediction-market sports betting undermines that framework, while Cafferelli said the companies are not truthful about legality and are not meeting Connecticut’s consumer protection standards and gaming laws.

Cafferelli said only licensed sportsbooks may offer sports wagering in Connecticut. He accused prediction-market companies of using terms such as trading, financial strategy and market risk to make wagers look like investments, when in practice they are indistinguishable from sports betting except for the absence of consumer protections.

The state also issued nearly 30 subpoenas as part of the investigation. Those requests went to nine licensees and 15 media organisations, and later reporting said the targets included payment processors and app stores such as PayPal, LexisNexis, Apple App Store, Google Play, Apple Pay, Google Wallet and Stripe, along with outlets including Hearst Connecticut Media Group, the Hartford Courant, ESPN, NBC Connecticut and WFSB.

Officials said the subpoena recipients were not themselves under investigation, but may have information relevant to the case. Cafferelli said the enforcement push was aimed at illegal prediction-market activity as the NFL season opened, and one site had already agreed to comply.