Connecticut Targets Prediction Markets’ Distribution Stack
Connecticut expanded its campaign against sports event prediction markets beyond Kalshi. Last week, the state issued cease-and-desist orders to nine companies and nearly 30 subpoenas that reach payment processors, app stores, identity-verification providers, sports-data businesses and media organizations. The Connecticut Department of Consumer Protection’s actions, announced in a Thursday (Sept.…
Connecticut's Department of Consumer Protection has taken aggressive action against prediction market platforms, issuing cease-and-desist orders to nine companies and nearly 30 subpoenas. The orders target payment processors, app stores, identity-verification providers, sports-data businesses, and media organizations. The orders require companies like Polymarket, Coinbase, Crypto.com, Robinhood, Gemini, ProphetX, Novig, Webull, Underdog Predict, PayPal, Plaid, Paysafecard, Socure, LexisNexis, Sportradar, Genius Sports, Integrity Compliance 360, Apple, Google, and Stripe to stop advertising and promoting sports event contracts or allegedly unlicensed online gambling to Connecticut residents.
They must also permit withdrawals of funds held on their platforms. Failure to comply could result in civil or criminal penalties. The state claims the products are illegal gambling and that the companies have accepted wagers from prohibited customers. The subpoenas could have broader implications for companies that distribute, promote, and support prediction market products.
The initiative expands Connecticut's litigation against Kalshi, which is proceeding separately. The outcome may set a precedent for other states to scrutinize payment, app access, advertising, customer identification, and relationships with service providers involved in prediction markets.
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