Connecticut adds Coinbase, Gemini and Webull to sports contract ban

Governor Ned Lamont signed off on cease-and-desist orders against nine prediction market platforms on Friday, expanding Connecticut's enforcement beyond the original eight. The new name on the list was Coinbase — the largest crypto exchange in the United States, now formally ordered to stop offering sports event contracts to Connecticut residents alongside Polymarket, Robinhood, Gemini, Webull, ProphetX, Novig, Underdog Predict, and Crypto.com.

The addition of Coinbase matters more than the number. When Connecticut went after eight platforms earlier this week, the list looked like a sweep of specialist prediction market operators with Robinhood as the notable crossover name. Adding Coinbase signals something different: the state is willing to go after infrastructure players, firms whose prediction market exposure is a small fraction of their total business and whose legal resources are not small. That changes the character of this fight.

The legal foundation Connecticut is working from is a federal district court ruling from August that found sports event contracts constitute illegal unlicensed gambling under state law and are not shielded by federal commodities regulation. That ruling has not been reversed. Iowa's federal judge reached a similar conclusion on different grounds last month, citing Congressional silence rather than an express preemption analysis. Two federal judges in two different circuits have now looked at the same core argument — that CFTC registration immunises these contracts from state gaming law — and declined to accept it.

Commissioner Bryan Cafferelli's statement that "our laws are clear" is the kind of thing officials say when they have a court ruling behind them. Governor Lamont's framing was sharper: prediction markets "are not being truthful when they tell consumers that their activities are legal." That is not a regulatory notice. That is a consumer fraud argument, and it opens the door to penalties under the Connecticut Unfair Trade Practices Act, which carries civil exposure well beyond a cease-and-desist.

The state also documented conduct that makes the enforcement harder to contest on sympathetic grounds: wagers accepted from users under twenty-one, transactions with individuals on the voluntary self-exclusion list, and markets offered on Connecticut collegiate sports, which are explicitly prohibited. If any of those allegations hold up, the platforms lose the ability to frame this as a jurisdictional abstraction. It becomes a compliance failure on conduct that licensed sportsbooks would lose their licences over.

My read is that the market is underpricing the durability of state enforcement here. The conventional assumption has been that federal preemption would eventually resolve in the platforms' favour — that the CFTC's approval of event contracts would prove decisive. Two federal rulings and now a nine-platform cease-and-desist suggest that assumption is doing more work than the legal record supports. Kalshi is headed to the Ninth Circuit for en banc review. Robinhood has filed for Supreme Court consideration. Both are the right moves, because the lower court record is not going their way.

But the Supreme Court does not move on a schedule that helps anyone operating in Connecticut right now. The platforms face a choice between compliance and contempt while the appellate clock runs, and Coinbase's inclusion tells me Connecticut calculated that at least some of these firms will comply rather than fight — which validates the strategy and invites the next state to copy it.