Connecticut Cracks Down on Prediction Markets

Jonathan Rodriguez

Written by: Jonathan Rodriguez

Published: Fri Sep 11, 2026, 11:00 am ET

Read Time: 3 minutes

Connecticut Cracks Down on Prediction Markets

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Connecticut has intensified its fight against prediction markets offering sports event contracts to state residents. 

The state's Department of Consumer Protection (DCP) issued cease-and-desist orders against nine operators. Officials argue these platforms are offering unlicensed sports gambling rather than financial products.

The latest action expands Connecticut's broader investigation into prediction markets and their growing presence in the sports betting market. It also highlights a widening conflict between state gambling regulators and companies operating under federal derivatives oversight.

Connecticut Targets Nine Prediction Market Operators

The DCP ordered nine prediction market operators to halt sports event contracts in Connecticut. The targeted companies include Polymarket, Coinbase, Crypto.com, Robinhood, ProphetX, Novig, Webull, Gemini, and Underdog Predict.

The orders require the companies to stop advertising, promoting, and offering sports contracts to Connecticut consumers. Operators must also allow affected customers to withdraw their funds.

Connecticut officials maintain that these products effectively function as sports wagers. Consequently, they argue that operators must comply with the state's gambling laws and consumer protection requirements.

Gov. Ned Lamont also raised concerns about the potential impact on athletes and younger consumers.

"We're putting ourselves at risk. We're putting our kids at risk," Lamont said. "I've got to make sure that the prediction markets don't play games with us as well."

Lamont specifically questioned whether prediction markets could create opportunities for athletes to bet on their own competitions.

"Look, you really want our athletes betting on their own sports? Does that really make sense?" Lamont said. "You could do that over the prediction markets, not in our way, not going to allow it here in the state of Connecticut."

DCP Says Prediction Markets Lack Consumer Protections

DCP Commissioner Bryan T. Cafferelli accused prediction markets of presenting sports wagers as financial investments.

"They have embarked on a coordinated campaign to convince people that they are offering investments by using such terms as trading, financial strategy, market risk, falsely implying that wagers are akin to traditional savings or investment vehicles," Cafferelli said at a press conference held at the Fanatics Sportsbook at the PeoplesBank Arena.

"In reality they are indistinguishable from sports wagering, except they don't have consumer protections."

Cafferelli also contrasted prediction markets with Connecticut's regulated sports betting operators. The state currently licenses sportsbooks that must follow rules designed to protect consumers and sports integrity.

"These… platforms are subject to oversight from our agency," Cafferelli said. "They must adhere to regulations and standards that are designed to prevent harm to consumers and protect the integrity of the marketplace."

Investigation Expands Beyond Prediction Markets

Meanwhile, Connecticut has expanded its investigation beyond the operators themselves. The DCP issued 29 subpoenas seeking information about the prediction market industry.

The subpoenas reportedly involve payment processors, identity verification companies, sports-data providers, app stores, and media organizations. The state says receiving a subpoena does not mean those companies are accused of wrongdoing.

The investigation could nevertheless provide regulators with more information about how prediction markets reach Connecticut consumers.

Kalshi Dispute Adds Federal Dimension

Connecticut's latest action also follows its ongoing legal dispute with Kalshi. The prediction market operator argues that its event contracts qualify as federally regulated financial products.

Connecticut instead maintains that sports contracts constitute gambling under state law. That disagreement creates a major jurisdictional conflict between federal derivatives regulation and state gambling authority.

The dispute could have implications for the wider prediction market industry. As these platforms expand into sports, they increasingly compete with traditional US online sportsbooks for betting customers.

For now, Connecticut appears determined to enforce its interpretation of Connecticut gambling laws. The latest cease-and-desist orders show that regulators are willing to target multiple operators simultaneously.

Jonathan Rodriguez
Jonathan Rodriguez

Jonathan is an avid basketball fan, and is often looking forward to the next upcoming NBA season when not checking players' stats during games. He also likes to keep his ears on the ground for the latest rumblings in the online casino industry.

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