Underdog Sues Connecticut Over Sports Prediction Market Crackdown

Sports gaming company Underdog has filed a federal lawsuit against Connecticut officials, seeking to stop the state from treating its sports related event contracts as illegal gambling.

Company Argues Federal Law Overrides State Enforcement

Underdog says it operates as a federally regulated designated contract market and argues the Commodity Futures Trading Commission holds exclusive authority to oversee trading on such platforms, making any Connecticut enforcement action legally baseless.

The company is seeking a court order and injunction to protect its ability to keep operating in the state, arguing Connecticut’s action directly conflicts with the framework set by the Commodity Exchange Act.

Part Of A Broader Multi-State Legal Fight

The lawsuit follows cease and desist orders Connecticut’s Department of Consumer Protection issued last week to nine prediction market platforms, including Underdog, Polymarket, Coinbase, Crypto.com and Robinhood. A state official said sports betting can only legally be offered through licensed sportsbooks that follow state regulations. Underdog had already sued five other states, Ohio, Massachusetts, Wisconsin, New Mexico and Washington, earlier this month over similar enforcement efforts. Connecticut is among more than a dozen states taking action against prediction market platforms, having also sued Kalshi last month over the same type of sports event contracts.

The legal battle comes as Underdog faces a pending acquisition by UK-based IG Group in a deal valued at up to $1.3 billion, following a funding round last year that valued the company at over $1.2 billion.