Connecticut Issues Cease-and-Desist Orders to Nine Prediction Markets in Sweeping Sports Betting Crackdown

Hartford, Connecticut. The regulatory hammer has dropped on the prediction market industry. In a sweeping escalation of its war against unregulated gambling, the Connecticut Department of Consumer Protection (DCP) issued nine cease-and-desist orders and 29 subpoenas on Thursday, aiming to dismantle the infrastructure of unlicensed sports event contracts within state lines.[2]

The enforcement action targets a who's who of major financial and crypto platforms. Polymarket, Coinbase, Crypto.com, Robinhood, ProphetX, Novig, Webull, Gemini, and Underdog Predict all received immediate orders to halt operations. The state directive requires the nine operators to immediately cease advertising or offering "sports event contracts" to Connecticut residents, and mandates that they allow users to withdraw any held funds.[2][4]

State regulators are drawing a hard line, arguing that prediction markets are simply unlicensed sportsbooks operating under the guise of financial trading. DCP Commissioner Bryan Cafferelli stated plainly in a release: “Our laws are clear: sports betting may only be offered by legal, licensed sportsbooks that adhere to our regulations and technical standards.”[2][5]

The state's core argument centers on the consumer protection guardrails that regulated markets require but prediction platforms allegedly bypass. Officials pointed out that these unregulated exchanges have accepted wagers from individuals under the legal betting age of 21, as well as from people actively enrolled on Connecticut's voluntary self-exclusion list for problem gambling.[1][3]

Furthermore, the state alleges these platforms offer event contracts on Connecticut collegiate sports. When lawmakers legalized sports wagering in 2021, they explicitly prohibited betting on in-state college teams to protect student-athletes from harassment and undue influence—a restriction the prediction markets have routinely ignored.[2][3]

The enforcement sweep extends far beyond the operators themselves. The DCP issued 29 subpoenas to gaming service providers and media companies. While these secondary businesses are not currently under investigation, the state is actively mapping the payment processing pipelines and advertising networks that allow the prediction markets to reach consumers and process transactions.[2][4]

This week's actions build on the state's ongoing legal battle against Kalshi, another prominent prediction market. In August 2026, a federal judge in Connecticut denied Kalshi's request for a preliminary injunction, ruling that sports event contracts constitute illegal gambling rather than federally protected commodities.[2][5]

The collision between state gaming laws and prediction markets represents a massive financial battleground. With the American Gaming Association estimating that $40 billion will be wagered on the NFL this season, licensed operators like DraftKings, FanDuel, and Fanatics—the only three legal sportsbooks in Connecticut—face untaxed competitors operating entirely outside the state's compliance overhead.[2][5]

The nine targeted platforms now face a stark ultimatum: geoblock Connecticut residents immediately or risk severe legal consequences. Failure to comply with the cease-and-desist orders could trigger heavy civil penalties under the Connecticut Unfair Trade Practices Act, alongside potential criminal charges for violating state gaming statutes.[2][4]