Connecticut Expands Prediction Market Crackdown: Subpoenas Apple, Google, PayPal, ESPN, and 15 Newsrooms in Sweeping Investigation

Connecticut's fight with prediction markets just widened well past the platforms themselves.

On September 10, Governor Ned Lamont and Consumer Protection Commissioner Bryan T. Cafferelli announced that the state's Department of Consumer Protection had issued nine cease-and-desist orders to companies it says are illegally operating prediction markets in Connecticut, along with nearly 30 subpoenas connected to the investigation. The subpoenas didn't stop at gambling companies. They went out to payment processors, identity verification firms, sports data providers, app stores, and fifteen media organizations across the state.

Nine Platforms, One Order

The cease-and-desist letters went to Polymarket, Coinbase, Crypto(.com), Robinhood, ProphetX, Novig, Webull, Gemini, and Underdog Predict. Each was ordered to immediately stop advertising, offering, or promoting sports event contracts, or any other form of unlicensed online gambling, to Connecticut residents, and to let Connecticut users withdraw whatever funds the platforms are currently holding for them. The state says these companies have been accepting wagers from underage bettors, from people on the state's voluntary self-exclusion list, and on Connecticut collegiate sports, which is barred outright under state law to protect student athletes from harassment and influence.

The state's language is blunt. Lamont said prediction markets have branded themselves as legal and safe while failing to meet Connecticut's consumer protection standards, and accused the industry of not being truthful with consumers about the legality of what they're offering. Cafferelli framed it just as directly: sports betting in Connecticut may only come from licensed sportsbooks that follow the state's regulations and technical standards, full stop.

Failure to comply, the state notes, can bring civil penalties under Connecticut's Unfair Trade Practices Act, criminal penalties under its gaming statutes, or both.

The Subpoenas Are the Real Story

Nine platforms getting cease-and-desist letters is one thing. Thirty entities getting subpoenaed for information is a much bigger investigation, and the list of who received one is worth sitting with.

Nine licensed gaming service providers were subpoenaed, including PayPal, Plaid, and Paysafecard as payment processors, LexisNexis and Socure for identity and know-your-customer verification, Integrity Compliance 360 for regulatory technology, and SportRadar Solutions, Genius Sports Media, and Genius Tech International for sports data and analytics. These are the companies that quietly power the infrastructure behind prediction markets: verifying who's placing a bet, moving the money, and supplying the odds data. Connecticut going after that layer suggests investigators are trying to map the entire financial and technical pipeline, not just the customer-facing apps.

Fifteen media organizations were also subpoenaed, including the Hartford Courant, Hearst Connecticut Media, ESPN, and several local television and radio broadcasters. The state was careful to note that none of the businesses receiving subpoenas, media or otherwise, are under investigation themselves. They're being asked to turn over information the department believes is relevant to the broader inquiry, which strongly implies advertising and sponsorship arrangements between these outlets and prediction market platforms are part of what regulators want to see.

Apple, Google, Apple Pay, Google Wallet, and Stripe rounded out the list, covering both app-store distribution and non-licensed payment processing. Between the licensees, the media companies, and the platform gatekeepers, Connecticut has now touched nearly every layer a prediction market needs to reach a customer: the app, the ad, the payment, and the verification.

This Follows a Lawsuit Connecticut Already Won Once

This action doesn't stand alone. Earlier this month, Connecticut sued Kalshi, the largest prediction market operator, seeking an injunction to block the company from offering unlicensed sports wagers in the state. According to the state's press release, a federal judge in Connecticut ruled in August that sports event contracts are illegal, unlicensed gambling and are not protected by federal commodities law, a ruling the state is clearly treating as validation for this week's broader sweep.

Connecticut currently licenses exactly three platforms to offer sports wagering: DraftKings through Foxwoods, FanDuel through Mohegan Sun, and Fanatics through the Connecticut Lottery. Bettors must be 21 to participate in sports wagering, with an 18-plus threshold carved out for fantasy contests specifically.

The State Framed This as Public Health, Not Just Law Enforcement

Two additional voices in the announcement pushed the story past pure legal enforcement. Nancy Navarretta, commissioner of Connecticut's Department of Mental Health and Addiction Services, pointed to the state's statewide network of gambling prevention, treatment, and recovery services, and highlighted the Problem Gambling Helpline at 1-888-789-7777 for anyone worried about their own betting or a loved one's. Diana Goode, executive director of the Connecticut Council on Problem Gambling, went further, explicitly endorsing the state's use of "judicial remedies, when necessary" and warning against letting "innovation or new terminology" be used to sidestep the protections Connecticut residents are supposed to have.

That framing matters for how this story gets read nationally. Connecticut isn't only positioning this as a jurisdictional fight over whether prediction markets count as gambling or commodities. It's positioning the entire prediction market category as a public health and consumer protection risk on the same footing as underage gambling and addiction, with the state's mental health agency and problem-gambling advocates standing next to the governor at the announcement.

For an industry that has spent the past year arguing in federal court that its contracts are financial products regulated by the CFTC rather than gambling regulated by the states, Connecticut just made clear it isn't interested in relitigating that argument case by case. It's going after the entire ecosystem at once, from the apps in the App Store down to the newsrooms covering them.