Connecticut has issued nine cease-and-desist orders to prediction market operators and 29 subpoenas to gaming licensees and media companies, Gov. Ned Lamont and Department of Consumer Protection Commissioner Bryan Cafferelli announced Thursday, marking the state’s most sweeping action yet against unlicensed sports event contracts.
This enforcement follows Connecticut’s lawsuit against Kalshi last month, arguing that prediction markets are “no different than sports betting.” The following nine operators received cease-and-desist orders:
- Polymarket
- Coinbase
- Crypto.com
- Gemini
- Novig
- ProphetX
- Robinhood
- Underdog Predict
- Webull
“Our laws are clear: sports betting may only be offered by legal, licensed sportsbooks that adhere to our regulations and technical standards,” Commissioner 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.”
Suppliers were also swept into the state’s subpoenas, a detail that hints at a bigger risk facing the companies prediction markets depend on to operate.
Predictions cease-and-desist details
The press release stated that the nine operators “are ordered to immediately” halt advertising, promoting, offering and making sports event contracts available to Connecticut residents.
Failure to comply could result in civil penalties under the Connecticut Unfair Trade Practices Act and/or criminal penalties for violations of Connecticut’s gaming statutes.
Lamont said Connecticut has been at the “forefront” of protecting consumers from unregulated gambling markets, pointing to the state’s lawsuit against Kalshi last month as part of that effort.
“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,” Lamont added. “When we legalized sports wagering in 2021, the goal was to create a safe, responsibly regulated market for Connecticut consumers, not to open a free-for-all.”
Connecticut has three regulated sports betting operators, which include DraftKings, Fanatics, FanDuel.
Subpoenas widen the net
The suppliers and media outlets are not under investigation themselves, but the state says they may have information relevant to its case against prediction market operators.
The state issued subpoenas to nine businesses with gaming licenses in Connecticut:
- Compliance and integrity monitoring: Integrity Compliance 360;
- Data suppliers: Genius Sports Media, Genius Tech International and Sportradar;
- Identity verification: LexisNexis and Socure;
- Payment processing providers: PayPal, Plaid, and Paysafecard, all licensed as gaming service providers for payment processing.
Fifteen media organizations were also subpoenaed, among them Audacy, ESPN, the Hartford Courant, NBC Connecticut, the Norwich Bulletin.
Both the Apple App Store and Google Play Store, along with payment platforms Apple Pay, Google Wallet, and Stripe, received subpoenas as well.
Where this fits in Kalshi fight
Kalshi wasn’t included in this round of cease-and-desist orders because the state is already pursuing it separately in court.
The state sued Kalshi last month for offering illegal and unlicensed sports betting. That followed U.S. District Judge Vernon Oliver‘s denial of Kalshi’s request for a preliminary injunction.
Kalshi is now appealing that decision to the Second Circuit. The court has so far declined to grant the company relief while the case proceeds.
The prediction market is barred from offering sports contracts in Massachusetts, Michigan, Nevada, New York, Utah, and Washington.
