Connecticut is intensifying its regulatory pressure on major prediction platforms by issuing new cease-and-desist orders, even as the industry experiences rapid growth and attracts significant institutional interest. These actions come at a time when crypto-aligned companies are expanding their influence in event-based markets.
— Connecticut Department of Consumer Protection (@CTDCP) December 3, 2025 Today, DCP's Gaming Division issued Cease and Desist orders to three platforms conducting unlicensed sports wagering. Learn why Prediction Market Platforms offering "Sports Events" Contracts are illegal: https://t.co/LXLK1tRR0w
State Enforcement Intensifies in the Prediction Platforms Landscape
Connecticut has issued new cease-and-desist orders against several operators offering event-based contracts, asserting that these platforms are effectively providing unauthorized sports wagering. The Department of Consumer Protection argues that these platforms operate markets that extend beyond the scope permitted by state law and do so without the required licenses. This action specifically targets services that enable users to trade outcomes tied to sports, economic indicators, and cultural events, a segment that has experienced rapid expansion due to crypto infrastructure and robust retail demand.
Kalshi, one of the platforms targeted, responded promptly by asserting its operations fall under the exclusive supervision of the Commodity Futures Trading Commission (CFTC). The company has filed a legal challenge, contending that the state's intervention conflicts with a federal framework specifically designed for derivatives exchanges. This dispute highlights the ongoing tension between state-level regulatory authority and established federal regulatory systems, particularly as prediction markets increasingly adopt digital-asset settlement models and rely on decentralized technology for liquidity and verification.
Similar enforcement actions have been observed in other states across the country. New York and Massachusetts have recently initiated measures, following earlier orders issued by Arizona, Illinois, Montana, and Ohio. Despite these regulatory interventions, trading activity continues to accelerate nationwide. November saw record volumes, driven by the integration of stablecoins, automated liquidity systems, and increasing experimentation by institutions with event-driven financial instruments.
Crypto Partnerships Drive Sector Expansion
Even amidst heightened regulatory scrutiny, Fanatics has advanced its presence in the market with a new platform powered by Crypto.com. This service facilitates trading across sports, finance, and politics, with plans for future expansion into categories such as crypto, climate, technology, and culture. Crypto.com is supporting these operations through its CFTC-registered derivatives subsidiary, reinforcing a compliance-aligned structure designed to compete effectively with established platforms in the space.
This expansion coincides with strong momentum for Polymarket and other operators that are integrating crypto wallets and oracle-based data verification systems. The combination of blockchain-based settlement and event-based markets is attracting a growing user base seeking exposure to measurable outcomes without the need for traditional intermediaries.
The conflict between Connecticut and major prediction platforms underscores a significant divide between state-level enforcement efforts and federal oversight, which is being strengthened by crypto-enabled market structures. Despite the ongoing legal friction, the sector's continued growth suggests that adoption will persist, fueled by ongoing innovation, capital inflows, and a rising demand for alternative tools to manage information and risk.