Nine cease-and-desists and nearly 30 subpoenas issued in relation to illegal prediction market activity in Connecticut
The state of Connecticut is continuing its crackdown on illegal prediction market platforms by issuing nine cease-and-desist orders to leading operators.
After taking action against Kalshi last month, Governor Ned Lamont and Connecticut Consumer Protection (DCP) commissioner Bryan Cafferelli have set their sights on the other leading prediction market platforms, including Polymarket, Underdog, Crypto.com and Robinhood.
Alongside the nine cease-and-desist orders, the DCP has issued nearly 30 subpoenas to gaming service provider license holders and Connecticut media outlets.
Businesses that received subpoenas are not under investigation by the department, but may possess information pertinent to the state’s investigation into illegal prediction market operations in Connecticut.
“Connecticut has been at the forefront of this issue, leading the way in protecting consumers – including young people, student athletes, and those suffering from gambling addiction – from unregulated gambling markets, which put your money and information at risk,” said Governor Lamont. “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.
“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.”
Commissioner Cafferelli said: “Our laws are clear: sports betting may only be offered by legal, licensed sportsbooks that adhere to our regulations and technical standards. 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.”
The DCP issued cease-and-desist orders to nine prediction markets known to be operating illegally in Connecticut, including: Polymarket, Coinbase, Crypto.com, Robinhood, ProphetX, Novig, Webull, Gemini and Underdog Predict.
All nine platforms are ordered to immediately cease and desist advertising, offering, promoting, or otherwise making available “sports event contracts” or any other form of unlicensed online gambling to Connecticut residents.
The DCP also ordered all three platforms to allow Connecticut residents to withdraw any funds currently held by the platforms.
Failure to comply may result in additional action including, but not limited to, civil penalties under the Connecticut Unfair Trade Practices Act and/or criminal penalties for violations of Connecticut’s gaming statutes.
Subpoenas were issued to a total of 9 licensees and 15 media organizations, but are not under investigation by the department.
These include PayPal, LexisNexis, Paysafecard, Integrity Compliance 360, Sportradar and Genius Sports, alongside media organizations such as Hearst Connecticut Media, The Hartford Courant, ESPN and NBC Connecticut.
App stores and non-licensed payment processing organizations that received subpoenas include; Apple App Store, Google Play, Apple Pay, Google Wallet, and Stripe.
“Connecticut has worked hard to establish a strong regulatory framework that includes meaningful consumer protections, safeguards for young people, responsible gambling requirements and access to resources for those who may experience harm,” Diana Goode, executive director of the Connecticut Council on Problem Gambling, said. “We commend Governor Lamont, Commissioner Cafferelli and the Department of Consumer Protection for their continued efforts to ensure that organizations offering gambling opportunities to Connecticut residents are held to those standards.
“When organizations operate outside that framework, critical protections can be lost. We support the state’s efforts, including seeking judicial remedies, when necessary, to preserve the integrity of Connecticut’s regulatory system and ensure that innovation or new terminology is never used to circumvent the protections Connecticut residents deserve.”
Earlier this month, Connecticut sued Kalshi and sought a court injunction to block the site from offering unlicensed sports wagers in Connecticut.
A federal judge in Connecticut ruled in August that sports event contracts are illegal unlicensed gambling and are not protected by federal commodities law.
In Connecticut, the three gaming platforms licensed to offer sports wagering are DraftKings (Foxwoods), FanDuel (Mohegan Sun), and Fanatics (Connecticut Lottery).