Underdog Sues Connecticut, Its Sixth State in Ten Days, Over a Cease-and-Desist

The 9 September order from the Department of Consumer Protection told Underdog to stop advertising and offering sports event contracts and to let residents withdraw. Underdog's answer, filed in federal court on Tuesday, is the same one it gave Ohio, Massachusetts, Wisconsin, New Mexico and Washington: the CFTC has "exclusive jurisdiction" over a designated contract market, so the state's action is "meritless".

• Underdog filed suit against Connecticut officials in federal court on Tuesday, 15 September, seeking declaratory and injunctive relief to stop the state treating its sports event contracts as illegal gambling, crypto.news and WSHU report
• The complaint argues that Underdog operates a federally regulated designated contract market (DCM), that the Commodity Exchange Act gives the CFTC "exclusive jurisdiction" over trading on DCMs, that Connecticut's rules are preempted, and that any state enforcement would be "meritless"
• It follows a cease-and-desist notice dated 9 September from DCP Director of Gaming Kristofer Gilman ordering Underdog to end all advertising, promotion and operation of sports event contracts in the state and to allow Connecticut residents to withdraw their funds; the department sent the same order to nine platforms, including Polymarket, Coinbase, Crypto.com and Robinhood
• "Our laws are clear: sports betting may only be offered by legal, licensed sportsbooks that adhere to our regulations and technical standards," DCP Commissioner Bryan Cafferelli said when the orders were issued
• Connecticut is the sixth state Underdog has sued in ten days, after its pre-emptive suits in Ohio, Massachusetts, Wisconsin, New Mexico and Washington; the state itself sued Kalshi in August, and the CFTC asked a court to block Connecticut the day after the nine orders

The Sixth Suit, and the First Provoked by an Order

Underdog has taken Connecticut to federal court, extending to a sixth state its campaign to have judges rule that state gambling law cannot reach a sports event contract traded on a CFTC-designated exchange. The suit, filed on Tuesday, seeks a declaration and an injunction preventing state officials from enforcing Connecticut's gambling rules against the company's contracts, crypto.news reported, with WSHU confirming the filing on Wednesday. The five earlier suits, in Ohio, Massachusetts, Wisconsin, New Mexico and Washington, were pre-emptive. This one answers a specific order.

That order came on 9 September from the Department of Consumer Protection's director of gaming, Kristofer Gilman, and told Underdog to "immediately" cease all advertising, promotion and operation of sports event contracts within Connecticut and to allow residents to withdraw their funds. It was one of nine the department sent that day to prediction-market platforms including Polymarket, Coinbase, Crypto.com and Robinhood. "Our laws are clear: sports betting may only be offered by legal, licensed sportsbooks that adhere to our regulations and technical standards," Commissioner Bryan Cafferelli said at the time. Connecticut's position is that a contract tied to a sporting event is sports wagering when offered to residents by anyone without the state licence that sportsbooks hold.

Underdog's argument is the one every exchange has made and the courts have split on. The company says it operates a federally regulated designated contract market; that the Commodity Exchange Act gives the CFTC "exclusive jurisdiction" over trading on such markets; that Connecticut's attempt to stop the contracts conflicts with that federal framework and is therefore preempted; and that any state enforcement action would be "meritless". The complaint was posted by the gaming lawyer Daniel Wallach on 16 September.

A State That Is Already in Court Three Times Over

Connecticut is not new to this fight. It ordered Kalshi, Robinhood and Crypto.com to stop offering sports contracts in December 2025, sued Kalshi in August seeking an injunction, and issued the nine cease-and-desists on 9 September. The following day the CFTC itself asked a federal court to block the state, an intervention that a New York judge has since questioned in a parallel case. Underdog's suit adds a private plaintiff to the federal side of a dispute in which the regulator is already a party.

The courts have not spoken with one voice. The Ninth Circuit ruled against Kalshi twice in three weeks, for Nevada and then for two California tribes, holding that the Commodity Exchange Act and state or tribal gaming law "simply address two different questions". Other district courts have granted the exchanges injunctions. The Supreme Court's conference on Kalshi is on 28 September.

Underdog Is Litigating Like a Company That Cannot Afford to Wait

Kalshi and Polymarket can lose a state and keep trading elsewhere. Underdog cannot. It surrendered its fantasy licences in seven states days before the first five suits, which means its sports business now rests on the event-contract product and the federal argument alone. Six suits in ten days is not a legal strategy so much as a survival one: the company needs a favourable ruling in some circuit quickly enough to keep operating while the Supreme Court decides whether to take the question at all.

Connecticut Has Turned Itself Into the Test Case

Nine orders, a suit against Kalshi, a CFTC action against the state and now a suit from Underdog make Connecticut the jurisdiction where every party to the prediction-market fight is in the same courthouse. That is useful for the law and dangerous for the state, because whichever court rules first on the Connecticut facts will be read as ruling on the whole design of the cease-and-desist strategy that a dozen states have copied. The Department of Consumer Protection picked this fight with a single sentence about licensed sportsbooks; it will now be defended in at least three proceedings.

"Meritless" Is Doing a Lot of Work After the Ninth Circuit

Underdog's complaint calls any state enforcement meritless, and two weeks ago that was a respectable position. After the Ninth Circuit held twice that IGRA and state law address a different question from the CEA, it is an argument that a federal court in Connecticut, in the Second Circuit, will have to distinguish rather than adopt. Underdog is betting that the Second Circuit sees preemption where the Ninth did not. That is the same bet Kalshi has taken to the Supreme Court, and Underdog needs the answer sooner.

Connecticut told nine platforms to stop. One has sued, the regulator has sued, and the state was already suing. The order has become the case.