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The Gambling Wire: CFTC, Robinhood Escalate Connecticut Prediction Market Fight

By jili tutorial · September 15, 2026

The Gambling Wire: CFTC, Robinhood Escalate Connecticut Prediction Market Fight

Overview: A Week of Escalation in Prediction Markets and Sports Betting

Friday marked the end of a particularly intense period of legal filings, regulatory pressure, and industry moves across the worlds of prediction markets, sports betting, and gambling sponsorships. Over the weekend and into the new week, several major developments unfolded, with Connecticut emerging as a central battleground. The U.S. federal government sought to block the state from enforcing its gambling laws against prediction markets, while trading platform Robinhood moved to join the legal fray. Elsewhere, Crypto.com headed toward the Supreme Court, European regulators scrutinized prediction markets more closely, and new sports betting sponsorships appeared in the English Premier League.

This guide breaks down each key development, provides context, explains the legal and regulatory stakes, and offers examples to help readers understand the broader implications for the industry.

The Big Story: Connecticut Prediction Market Fight Expands

CFTC Seeks Federal Injunction to Block State Enforcement

The Commodity Futures Trading Commission (CFTC) has asked a federal judge to prevent Connecticut from enforcing its gambling laws against prediction markets. On September 11, the CFTC filed a motion for a preliminary injunction in the U.S. District Court for the District of Connecticut. This move came directly after Connecticut intensified its enforcement campaign, issuing cease-and-desist orders to nine prediction market platforms and nearly 30 subpoenas as part of the state’s investigation.

What this means: The CFTC argues that federal commodities law preempts state gambling regulations when it comes to event contracts traded on federally regulated exchanges. If the injunction is granted, Connecticut would be barred from taking action against platforms offering such contracts—at least until the full legal case is resolved.

Robinhood Joins the Case

On the same day as the CFTC’s filing, Robinhood—which received one of Connecticut’s cease-and-desist orders—asked for permission to intervene in the lawsuit. In its legal filing, the company stated that the enforcement action gave it a direct and concrete interest in the outcome of the case. Connecticut has not opposed Robinhood’s intervention.

Why this matters: Robinhood’s participation adds a major financial services player to the fight. Unlike smaller prediction market platforms, Robinhood has the resources to push back aggressively against state regulation. Its involvement could set a precedent for how other mainstream brokers engage with prediction markets.

Background: The Kalshi and Coinbase Lawsuits

These developments follow a pattern of escalating legal battles:

Example: Consider a hypothetical prediction market contract for “Will a specific NFL player score a touchdown in Week 1?” Connecticut views this as illegal gambling, while the CFTC considers it a legitimate commodity derivative. This fundamental disagreement is at the heart of all the lawsuits.

Crypto.com Joins the Supreme Court Push

A Growing Coalition Asks for High Court Review

Crypto.com has joined Robinhood in petitioning the U.S. Supreme Court to review a critical Ninth Circuit ruling. On September 11, the North American Derivatives Exchange (Crypto.com’s exchange) filed its own petition, following Robinhood’s separate filing the previous week.

The core issue: The Ninth Circuit ruled on August 28 that the Commodity Exchange Act (CEA) does not override Nevada’s ability to regulate sports event contracts as gambling. This decision contradicts a Third Circuit ruling that sided with Kalshi in a similar dispute with New Jersey.

What’s happening now:

Why it matters: The legal landscape is split across different federal circuits. Without Supreme Court intervention, prediction market operators will face inconsistent rules depending on the state or circuit. This uncertainty hurts businesses and consumers alike.

Ho-Chunk Case: Potential Seventh Circuit Appeal

Tribal Authority vs. Federal Commodities Law

A Wisconsin federal judge has cleared the way for Kalshi and Robinhood to seek an immediate appeal in a case brought by the Ho-Chunk Nation. The Nation is challenging the legality of sports event contracts offered on tribal lands under the Indian Gaming Regulatory Act (IGRA).

Key ruling: U.S. District Judge William Conley certified two questions for interlocutory appeal:

  1. Does the Commodity Exchange Act (CEA) preempt the Ho-Chunk Nation’s authority under IGRA to regulate sports event contracts on tribal lands?
  2. Does the Unlawful Internet Gambling Enforcement Act (UIGEA) preempt that same tribal authority?

Earlier decision: Conley previously ruled that federal commodities law does not override the Nation’s authority. He noted conflicting decisions across the country and wrote that the case “will certainly be appealed all the way up to the Supreme Court.”

Current status: The case is stayed while the defendants (Kalshi and Robinhood) ask the Seventh Circuit for permission to hear the appeal. The Circuit must still agree to take the case.

Why this is important: If the Seventh Circuit rules in favor of the Ho-Chunk Nation, it could empower other tribal nations to regulate prediction markets on their lands, creating a patchwork of jurisdictions with different rules. This case also highlights the unique legal status of tribal gaming authorities.

Kalshi Resolves NFL Player-Participation Contracts

What Happened With the Removed Markets

Earlier in September, Kalshi removed several injury-related contracts from its platform. After briefly reinstating some markets, the exchange has now notified customers how it will handle the unresolved “Pro Football Week 1: Players to Compete” contracts.

Resolution details:

Example: Suppose you bought a contract that pays out if Player X competes in Week 1. If Player X actually plays, you get paid. If they don’t, you get your money back—even though you would normally lose your investment.

Industry observer Nate Meininger commented on social media: “Kalshi finally just sent out emails regarding their ‘NFL Week 1: Players to Compete’ market. They’re paying out winners based off what happens + covering losers losses. Took them a while but this is the right thing to do now that the season has started imo.”

Why this matters: This move shows how prediction markets must balance regulatory pressure with customer fairness. By covering both winners and losers, Kalshi avoids accusations of unfair treatment while complying with whatever restrictions led to the removal.

European Regulator Examines Prediction Markets

ESMA Raises Concerns in Latest Report

The European Securities and Markets Authority (ESMA) has included a dedicated section on prediction markets in its latest risk report. Key findings and observations:

  1. Limited traction: Prediction markets have not gained significant traction in Europe compared to the United States.
  2. Regulatory fragmentation: Event contracts may fall under different frameworks—MiFID II (financial instruments), MiCA (crypto assets), or national gambling laws—depending on the specific product and jurisdiction.
  3. Authorization issues: The largest platforms generally do not hold the EU authorizations required to market such products.
  4. Geographic restrictions questioned: ESMA noted that even when platforms try to block users from certain countries, consumers can potentially access them through VPNs. The regulator said the effectiveness of those controls “remains uncertain” and that continued monitoring is warranted.

Context for readers: Unlike the U.S., where the CFTC claims authority over event contracts as commodity derivatives, European regulators view them more skeptically. The lack of a unified regulatory framework means platforms face an uncertain legal environment across EU member states.

Premier League Gambling Sponsorships: Sunderland Adds Shuffle

New Sleeve Sponsor Despite Voluntary Ban

The English Premier League has implemented a voluntary ban on front-of-shirt gambling sponsorships. However, betting brands remain visible elsewhere on club kits—particularly on shirt sleeves. The latest example is Sunderland AFC, which has signed a multi-year sleeve sponsorship deal with Shuffle, a Curaçao-licensed crypto casino and sportsbook. Shuffle replaces LiveScore Bet, which appeared on last season’s sleeve.

Context: This is the first season under the voluntary ban, which applies only to the front of shirts. As a result, teams have shifted gambling sponsors to sleeves, training kits, and other locations. Sunderland joins a growing list of clubs with gambling sleeve sponsors, including:

Why this matters: While the Premier League’s ban is a step toward reducing gambling exposure, critics argue it is largely cosmetic. By allowing sleeve sponsorships, the league still permits gambling brands to associate directly with clubs. Furthermore, Shuffle’s status as a crypto casino raises additional questions about regulation and consumer protection.

Industry Stories to Watch This Week

Upcoming Hearings and Deadlines

The legal and regulatory calendar remains full. Here are key items to follow:

Monday:

Ongoing dynamics:

Broader legal landscape:

Conclusion: What to Expect Next

The battle over prediction markets is far from settled. The CFTC is aggressively defending its jurisdiction, states like Connecticut and New York are pushing back, and major players like Robinhood, Coinbase, and Crypto.com are using their resources to shape the outcome. Meanwhile, tribal nations, European regulators, and sports leagues are all weighing in on different aspects of the debate.

For investors, operators, and bettors, the coming weeks and months will be critical. Court rulings, regulatory guidance, and legislative action could fundamentally reshape how prediction markets and sports betting operate—both in the U.S. and globally.