The Connecticut Department of Consumer Protection has issued orders to nine platforms, including Polymarket, Coinbase, and Robinhood, demanding they cease offering sports event contracts or unlicensed gambling to state residents. These companies must also allow users to withdraw their funds. The state cited non-compliance with gaming standards, including the acceptance of wagers from individuals under 21 and those on self-exclusion lists.
Regulators have expanded their inquiry by issuing subpoenas to infrastructure and media entities. Recipients include payment processors like PayPal, Stripe, and Plaid, as well as data providers such as Sportradar and Genius Sports. Additionally, 15 media organizations, including ESPN and the Hartford Courant, received subpoenas to provide information regarding the distribution and promotion of these products.
These administrative actions follow ongoing litigation against Kalshi. While a federal judge in August denied Kalshi's request to block state enforcement, legal interpretations remain inconsistent across different jurisdictions. The 9th Circuit and 3rd Circuit have issued conflicting rulings regarding the preemption of state gambling laws by federal commodities regulations, with the matter currently pending before the Supreme Court.
The state's approach signals a shift toward pressuring the entire distribution stack, including app stores and digital wallets. Companies now face increased compliance risks regarding state-specific regulations on marketing, age verification, and geolocation. Failure to comply with the department's directives may result in civil penalties under the Connecticut Unfair Trade Practices Act or criminal charges.
