Connecticut Orders 9 Prediction Markets to Stop Sports Bets

Connecticut has issued its most sweeping action yet against sports event contracts, sending cease-and-desist orders to nine prediction market operators and serving 29 subpoenas on gaming licensees and media companies. The move escalates a state-versus-federal conflict that now spans more than a dozen jurisdictions and appears headed for the Supreme Court.

Quick answer: Connecticut ordered nine prediction market operators — including Polymarket, Coinbase, Crypto.com, Gemini, Novig, ProphetX, Robinhood, Underdog Predict and Webull — to stop offering sports event contracts in the state, and issued 29 subpoenas to licensees and media partners as part of the investigation.

What Connecticut Actually Did

The state's action has two components. The cease-and-desist orders target the platforms directly, asserting that sports event contracts constitute gambling under Connecticut law and therefore require a state gaming license that none of the nine operators holds.

The 29 subpoenas are the more unusual element. By targeting gaming licensees and media companies rather than only the platforms, Connecticut is investigating the commercial ecosystem around prediction markets — affiliate arrangements, advertising deals and promotional partnerships.

• Nine operators received cease-and-desist orders
• 29 subpoenas went to licensees and media companies
• Scope covers sports event contracts specifically, not all prediction markets

The Federal-State Jurisdictional Fight

Prediction market operators argue that sports event contracts are federally regulated commodities derivatives under the Commodity Futures Trading Commission's authority, and that federal preemption bars state gaming regulators from intervening.

States counter that contracts settling on the outcome of a sporting event are functionally identical to sports wagers regardless of the wrapper, and that gambling regulation is a traditional state police power.

Where the courts have landed

Results have been mixed and geographically inconsistent. The Ninth Circuit ruled in Nevada's favor against Kalshi, a decision widely read as setting up potential Supreme Court review. In Michigan, an Ingham County judge replaced a temporary restraining order with a preliminary injunction requiring Kalshi to continue geofencing sports event contracts from state residents, with non-compliance carrying a potential penalty of $500,000 per day.

Other jurisdictions have gone the other way, producing exactly the kind of circuit-level disagreement that draws Supreme Court attention.

Why This Matters Beyond Connecticut

Connecticut is a small market, but the action is significant for what it signals about enforcement strategy. Targeting media companies and licensed operators — rather than only the platforms — raises the cost of doing business with prediction markets for every regulated entity in the state.

A licensed casino that partners with a prediction market risks its own license. A media company that accepts advertising risks subpoena. That indirect pressure can be more effective than direct enforcement against platforms that may simply geofence the state and move on.

The commercial stakes are large

An estimated $40 billion will be wagered on the NFL via prediction markets this year. Nearly 25% of MLB clubs now hold partnerships with prediction market operators, and celebrity endorsements from figures including LeBron James and Marshawn Lynch have accompanied the NFL season kickoff. Polymarket partnered with Splash Sports on a survivor contest carrying a guaranteed $21 million in prizes.

That is not a fringe product. It is a parallel sports wagering market operating outside state licensing, taxation and responsible gambling frameworks — which is precisely the regulators' objection.

What Licensed Sportsbooks Are Saying

Regulated operators have been vocal, and their argument is straightforward: they pay state taxes, fund problem gambling programs, comply with advertising restrictions and submit to geolocation and identity verification requirements. Prediction markets offering economically similar products without those obligations represent a competitive asymmetry.

Some operators have hedged by launching their own prediction market products, reasoning that if the category survives legal challenge, they cannot afford to be absent. Others have lobbied hard for state enforcement. Players comparing the two product types can review how the economics differ in our sports betting guide.

What It Means for Consumers

The practical effect for residents of enforcement states is that sports event contracts become unavailable. Geofencing is the standard compliance response, and it works the same way it does for licensed sportsbooks.

1. Existing positions are generally allowed to settle, though terms vary by operator.
2. New trades are blocked for users located in the restricted state.
3. Consumer protections differ meaningfully between prediction markets and licensed sportsbooks, particularly around dispute resolution and responsible gambling tools.

That third point is worth emphasizing. Licensed sportsbooks in regulated states must offer deposit limits, self-exclusion and problem gambling resources. Prediction markets operating under federal commodities rules are not subject to the same requirements.

What Happens Next

The realistic paths forward are Supreme Court resolution, congressional clarification, or a CFTC rulemaking that draws a clear line around sports event contracts. None will arrive quickly.

In the meantime, expect more state enforcement actions, more geofencing, and continued expansion in jurisdictions that have not acted. The patchwork is likely to get messier before it gets cleaner.

Frequently Asked Questions

Which companies received Connecticut cease-and-desist orders?

Polymarket, Coinbase, Crypto.com, Gemini, Novig, ProphetX, Robinhood, Underdog Predict and Webull were among the nine operators ordered to stop offering sports event contracts in the state.

Are prediction markets legal in the United States?

The answer is genuinely unsettled. Operators claim federal CFTC authority preempts state gambling law; multiple states disagree, and courts have split. A Supreme Court ruling may be required to resolve it.

How are prediction markets different from sportsbooks?

Prediction markets operate as exchanges where users trade contracts against each other, with the platform taking a fee. Sportsbooks set odds and take the other side of bets. Economically the outcomes can be similar, but the regulatory framework differs entirely.

Can I still use prediction markets in Connecticut?

Operators complying with the cease-and-desist orders are geofencing sports event contracts from Connecticut users. Non-sports markets are generally unaffected by the orders.

Will this reach the Supreme Court?

The Ninth Circuit ruling in Nevada's favor created the kind of appellate disagreement that often precedes Supreme Court review, though the Court has not agreed to hear a case as of this writing.

The Bottom Line

Connecticut's action is narrow in geography but broad in approach, going after the commercial ecosystem rather than just the platforms. It is a template other states are likely to copy while the underlying jurisdictional question works its way through the courts.

Follow the story and the wider regulatory landscape through our latest articles, or explore the gambling guides library for background on how US betting regulation works.