Connecticut Orders Nine Prediction Markets to Halt Sports Contracts

Connecticut regulators have ordered nine prediction market platforms to stop offering sports event contracts to state residents, putting the machinery of state enforcement behind the gaming exclusivity that the Mashantucket Pequot Tribal Nation and the Mohegan Tribe hold under their agreements with the state. The cease-and-desist letters, announced Sept. 11 by the Department of Consumer Protection, name Polymarket, Coinbase, Crypto.com, Robinhood, ProphetX, Novig, Webull, Gemini and Underdog Predict.

The action lands roughly two weeks after Connecticut sued KalshiEX, the largest operator in the category, and it arrives at the start of the NFL season, when sports wagering volume in the state peaks. For the two Connecticut gaming tribes, the orders are the clearest signal yet that the state intends to treat unlicensed prediction markets as an exclusivity problem rather than a novel financial product beyond its reach.

Why Connecticut prediction markets collide with tribal exclusivity

Connecticut's 2021 gaming expansion built a deliberately narrow online market. Sports wagering in the state runs through exactly three channels: DraftKings operating on behalf of the Mashantucket Pequot Tribal Nation's Foxwoods Resort Casino, FanDuel operating for the Mohegan Tribe's Mohegan Sun, and Fanatics operating for the Connecticut Lottery. That three-lane structure was the negotiated price of tribal consent to statewide mobile betting, and it is backed by exclusivity commitments the tribes have relied on in their capital planning for years.

Every contract traded on an unlicensed platform sits outside that structure. It carries no state tax, no tribal revenue share, no Connecticut-specific responsible gaming obligations and no licensing review. Mohegan executives have said publicly this year that the tribes hold exclusivity across all forms of gaming in the state and that the tribe is working with Connecticut officials to see that position enforced — a posture that has made the tribal operators effective allies of the regulator rather than bystanders to its enforcement docket.

Gov. Ned Lamont framed the orders in consumer-protection terms, arguing that the state legalized sports betting carefully and that unregulated event contracts undercut those safeguards. "We've rolled out sports betting. We've done it in a very thoughtful way, protecting our young people, protecting those problem gamblers out there," Lamont said. Consumer Protection Commissioner Bryan Cafferelli said at least one of the nine platforms had already committed to complying, and that the department hoped the orders would curb activity as the betting season ramped up.

A wider investigative net

The cease-and-desist orders are only part of what Connecticut has put in motion. The state has also subpoenaed nine licensees and 15 media organizations it says may hold information relevant to its investigation, a list that reportedly includes PayPal, LexisNexis, Hearst Connecticut Media and NBC Connecticut. Subpoenas directed at payment processors, data vendors and advertising carriers signal an enforcement theory that reaches past the platforms themselves to the commercial infrastructure that makes them usable and visible in the state.

That approach matters because the platforms named are not uniformly situated. Some are federally registered designated contract markets supervised by the Commodity Futures Trading Commission; others are brokers or crypto exchanges routing order flow to those venues. A state order aimed at a CFTC-regulated exchange invites a preemption fight. An order aimed at a broker, a payment rail or an advertising channel is considerably harder to characterize as an intrusion on federal commodities jurisdiction.

For tribal operators, the practical question is not whether prediction markets are commodities or gambling in the abstract, but whether a state with exclusivity obligations will act when an unlicensed channel captures volume that the compact framework assigned elsewhere.

Federal courts have been moving in the same direction

Connecticut is not acting in a vacuum. A federal judge ruled last month that sports event contracts offered by these platforms constitute illegal gambling and are not shielded by federal law, and the Ninth Circuit has since held that such contracts amount to Class III gaming under the Indian Gaming Regulatory Act when accessed from tribal lands. Those decisions do not bind Connecticut courts, but they change the settlement calculus for any operator weighing whether to contest a state order or quietly geofence the jurisdiction.

The underlying conflict between event contracts and IGRA exclusivity has been building across more than a dozen states since 2025, with tribes pursuing parallel tracks in federal litigation, before the CFTC, and in Congress. What distinguishes the Connecticut action is speed. An administrative cease-and-desist order can be issued in days; a federal preliminary injunction takes months. For a tribe watching a football season begin, that difference is the whole point.

What it means for the Connecticut market

Connecticut's two tribal gaming operators are among the most digitally mature in Indian Country. The Mohegan Tribal Gaming Authority has reported record digital earnings this year and operates internationally, giving it a clearer read than most tribal enterprises on where online handle is going. Its portfolio spans properties well beyond Uncasville, which means its exclusivity arguments in Connecticut are informed by what it sees in less protected markets.

The near-term effect of the orders is likely to be partial. Platforms that hold no federal registration and little appetite for litigation will geofence Connecticut quickly. Registered exchanges with capital to spend are more likely to contest, arguing that the Commodity Exchange Act occupies the field. That leaves the state's enforcement success dependent on how the courts resolve preemption — a question now working its way through multiple circuits.

What the orders do accomplish immediately is evidentiary. Each letter creates a record that the state identified specific conduct as unlawful on a date certain. If Connecticut's tribes later need to show that the state honored its exclusivity obligations — or that it did not — that record will be the starting point. Readers tracking how exclusivity provisions are drafted and enforced can find the framework in our legal guide to IGRA and Class III gaming, and a fuller picture of the state's operators in the Connecticut directory.

Connecticut has now taken three distinct actions against the category in under a month: a lawsuit against the largest operator, cease-and-desist orders against nine others, and subpoenas reaching payment and media intermediaries. Whether that sequence becomes a template for other compact states will depend less on the orders themselves than on what the platforms do next.