Connecticut Hits Nine Prediction Markets with Cease-and-Desist Orders

_{According to Connecticut Gov. Ned Lamont, prediction markets have not been truthful regarding their sports betting activities in the state. (Photo: Douglas Hook / Hartford Courant / TNS/ Sipa USA / Alamy)}

Connecticut Gov. Ned Lamont announced Thursday that the Connecticut Department of Consumer Protection (DCP) had issued nine cease-and-desist orders to prediction markets that it says are operating illegally in the state.

The action coincided with 30 subpoenas issued by the state to gaming service providers holding licenses in Connecticut.

Orders Follow Kalshi Lawsuit, Court Ruling

In a statement, Lamont and Connecticut Consumer Protection Commissioner Bryan T. Cafferelli noted that the subpoenas aren’t a sign that additional businesses are under investigation, but simply that they may have information relevant to investigations into prediction market operations in the state.

The prediction markets receiving cease-and-desist orders include:

·       Coinbase

·       Crypto.com

·       Gemini

·       Novig

·       Polymarket

·       ProphetX

·       Robinhood

·       Underdog Predict

·       Webull

The state previously sued Kalshi in August 2026, seeking an injunction that would prevent the prediction market from offering sports contracts in the state.

Governor Lamont said that the legalization of sports betting in 2021 was supposed to create a "safe, responsibly regulated market" for people in Connecticut rather than a "free-for-all."

“Prediction markets have branded themselves as legal and safe, but the reality is they are not adhering to Connecticut’s consumer protection standards and gaming laws, and they are not being truthful when they tell consumers that their activities are legal,” Gov. Lamont wrote.

The move from Connecticut officials follows a favorable ruling for the state from a federal judge last month, who found that sports event contracts are not protected by federal law and that the state may therefore regulate them as sports betting.

Prediction Market Battles Appear Headed for Supreme Court

Prediction markets and their supporters disagree with this assessment. They argue that they offer swaps as defined in the Commodity Exchange Act (CEA), and that their operations are therefore under the exclusive jurisdiction of the federal Commodity Futures Trading Commission (CFTC).

This interpretation of the CEA has led to many legal battles across the country, with state officials arguing against prediction markets and the CFTC. The results have been mixed, with two different circuit courts now offering contradictory rulings. That split made it all but certain that the issue would eventually reach the Supreme Court, and a recent filing by New Jersey could lead to a case being heard by SCOTUS as soon as this fall.

For now, however, Connecticut officials are leaning on the federal court ruling they received to enforce their state laws.

“Our laws are clear: sports betting may only be offered by legal, licensed sportsbooks that adhere to our regulations and technical standards,” Cafferelli said in a statement. “We are, first and foremost a consumer protection agency, and we will continue to do everything we can to protect all Connecticut consumers from misleading business practices that compromise their health and safety, personal information and hard-earned money.”

While Kalshi wasn’t among the platforms included in the cease-and-desist orders, it still issued a statement ahead of Connecticut’s announcement, denouncing the state’s tactics.

“You don’t protect consumers by blocking exchanges that are actually regulated,” Kalshi spokesperson Jacki McGavick said in a statement. “You just push them offshore, into markets with no oversight or safeguards at all. Call it whatever the Governor wants: blocking a modern, federally supervised market isn’t safety, it’s anti-innovation. The safest option is the one he’s fighting to keep out.”

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