The lawsuit follows after the Department of Consumer Protection of Connecticut sent 9 prediction markets cease-and-desist orders, including Underdog, Polymarket, Coinbase, Crypto.com, and Robinhood.
Underdog argues that it operates as a federally regulated designated contract market under the Commodity Futures Trading Commission, and that the Commodity Exchange Act gives the CFTC exclusive authority over trading on such markets, making any enforcement by Connecticut invalid. The company is asking the court for declaratory and injunctive relief to protect its ability to keep operating in the state, arguing that Connecticut’s order conflicts directly with federal law.
Underdog has stated in its lawsuit:
“This action seeks to prevent the Attorney General of Connecticut, the Commissioner of the Connecticut Department of Consumer Protection, and the Director of the Department’s Gaming Division from unlawfully exercising jurisdiction over, regulating, or terminating Underdog’s offering of lawful derivatives contracts on federally regulated markets.”
This marks Underdog’s sixth lawsuit against a state during September, as earlier, the company sued officials in Ohio, Massachusetts, Wisconsin, New Mexico, and Washington over similar sports event contract restrictions. Connecticut is also already fighting a similar battle with Kalshi, having sued the platform in August to block its sports contracts, and is one of more than a dozen states taking legal or enforcement action against prediction market operators.
