Underdog files lawsuit against Connecticut over prediction market crackdown

prediction market crackdown — Fantasy sports and prediction market platform Underdog Fantasy has sued the state of Connecticut, challenging the legality of its recent crackdown on prediction markets.

The lawsuit, filed in federal court, seeks to stop the state from enforcing cease-and-desist orders it issued to Underdog and other platforms, including Polymarket and Coinbase. The state’s actions targeted markets where users can bet on the outcomes of real-world events using digital assets.

Underdog argues that the state’s enforcement, led by the Department of Consumer Protection, violates federal law and the company’s First Amendment rights. The company claims its prediction markets are a form of protected speech and that federal law preempts state-level bans on such activities.

The legal challenge highlights the ongoing regulatory uncertainty surrounding crypto-based prediction markets in the United States. A ruling in Underdog’s favor could set a precedent limiting states’ ability to restrict these platforms.