Connecticut has ordered nine prediction market platforms to stop offering sporting-event contracts to residents, and Underdog responded by suing the state after being named in the crackdown. The move brings one of the sharpest state challenges yet to a fast-growing sports market built on event contracts that blur the line between trading and betting.
The orders name Robinhood, Polymarket and Underdog among the platforms told to halt the products. Connecticut said contracts tied to sporting events fall under gambling rules when they are offered to residents without sports betting licenses, putting the platforms in direct conflict with the state’s view of the law.
That dispute matters because Connecticut is not acting alone. It is one of more than a dozen states that have moved against prediction markets and sporting-event contracts, turning what had been a niche financial product into a wider legal fight over how those contracts are classified and who may offer them.
Underdog says it operates as a federally regulated Designated Contract Market, and it frames Connecticut’s enforcement as an intrusion into exclusive jurisdiction. That position sets up the central fight in the case: whether a federally regulated trading venue can keep offering sporting-event contracts in a state that treats those products as gambling when no sports betting license is in place.
For now, the practical effect is straightforward. Connecticut has put nine platforms on notice, and Underdog has chosen the courtroom rather than compliance. The next step will come from the legal arguments each side puts forward, and that ruling could decide whether the sports market can keep reaching Connecticut residents at all.
