Connecticut and Missouri tighten rules as operators retreat

Connecticut and Missouri join state enforcement wave as operators pull back

Three prediction market operators have withdrawn from Connecticut, and PrizePicks has suspended its Team Picks sports event contracts in Missouri — additions to a withdrawal map that now includes Michigan, Ohio, and a growing list of states where operators have concluded that operating under cease-and-desist pressure costs more than the pause.

The Connecticut pullbacks and Missouri suspension have received no formal regulatory statement in the public record. That absence matters. Michigan's Henry Williams named Coinbase, Robinhood, and Kalshi explicitly when announcing their agreements with the Michigan Gaming Control Board. Connecticut's silence means either the withdrawals were voluntary calculations made before enforcement escalated, or the enforcement record simply hasn't surfaced yet. Those are legally different situations, and the distinction will matter when any of these operators return.

The Michigan agreement with Coinbase is the cleaner story, and it reveals the structure that states are now using effectively. Coinbase agreed to stop offering new sports-event contracts to Michigan customers and to close open positions. In exchange, the state agreed to hold enforcement while Sixth Circuit appeals proceed. The MGCB was explicit: the agreement preserves all parties' rights. Nothing is conceded. The underlying legal dispute — whether Michigan may regulate CFTC-registered event contracts as gambling at all — remains entirely open.

That framing is the point. Michigan isn't claiming it won. It's claiming it doesn't need to win yet to achieve the operational result it wants. An operator that has paused is an operator that isn't serving customers, regardless of what the Sixth Circuit eventually holds.

The consensus read on this pattern is that it's transitional — a holding action until courts resolve the federal preemption question. I don't think that's where this lands. The state enforcement wave is building institutional capacity and legal precedent in parallel with the litigation. Every agreement like the Michigan-Coinbase deal establishes that CFTC-registered operators will enter state compliance frameworks as a practical matter, whether or not federal preemption ultimately holds as a legal matter. The behavior is being normalized before the doctrine is settled.

Rob Schwartz at Morgan Lewis called this a litigation mess at Predict 2026, which is accurate as a description of the current docket. Tyler Badgley, CFTC General Counsel, identified four distinct litigation buckets — DCMs suing states, states pursuing criminal indictments, the CFTC seeking injunctions, and everything else including tribal claims and class actions. That taxonomy is useful because it shows how many different legal theories are running simultaneously, each capable of producing a result that forecloses others.

The Cabazon Band has taken its Kalshi fight to the Supreme Court. Whether the Court takes the case before the Sixth Circuit produces a ruling is the scheduling question that shapes everything else. A Supreme Court grant before a circuit split is resolved would be unusual. A grant after the Sixth Circuit rules for either side would be expected.