Underdog sues Connecticut over sports prediction market crackdown

On Tuesday, Underdog filed a federal lawsuit against Connecticut officials to stop the state from categorizing its sports-related event contracts as unlawful wagering. The company seeks declaratory and injunctive relief to safeguard its operations within the state.

The suit argues that Underdog operates as a federally regulated designated contract market. Underdog claims the Commodity Futures Trading Commission has sole authority to oversee trading on these markets, making any Connecticut enforcement efforts baseless. The company maintained that the state’s directive to halt event contract sales is overridden by its direct clash with the Commodity Exchange Act.

"Our laws are clear: sports betting may only be offered by legal, licensed sportsbooks that adhere to our regulations and technical standards," said DCP Commissioner Bryan Cafferelli.

Underdog is not the sole platform encountering state legal disputes. Early this month, the firm brought suit against Ohio, Massachusetts, Wisconsin, New Mexico, and Washington to shield its sports event contracts from state oversight. Connecticut joins more than a dozen regions that have initiated legal steps or proceedings against prediction market entities concerning these products. The state also filed suit against Kalshi last month to stop the platform from providing comparable event contracts.