The Gambling Wire: Connecticut Targets Prediction Markets, Playtech Revenue Jumps

The Gambling Wire: Connecticut Targets Prediction Markets, Playtech Revenue Jumps

Overview: A Week of Regulatory Crackdowns, Earnings Surprises, and Legal Battles

The gambling and prediction market industry saw significant developments this week, ranging from Connecticut’s aggressive enforcement against nine prediction market platforms to Playtech’s strong earnings report. The Financial Action Task Force (FATF) also released new red-flag indicators for money laundering in gambling, while multiple legal challenges emerged across the United States. This guide breaks down each major story, provides context, and explains the implications for operators, investors, and consumers.

The Big Story: Connecticut Takes Aim at Prediction Markets

Cease-and-Desist Orders: Nine Platforms Targeted

Connecticut delivered Thursday’s most significant regulatory action by issuing cease-and-desist orders to nine prediction market platforms. The state’s Department of Consumer Protection (DCP) ordered the following companies to immediately stop advertising, promoting, or offering sports event contracts or other forms of unlicensed online gambling to Connecticut residents:

• Polymarket
• Coinbase
• Crypto.com
• Robinhood
• ProphetX
• Novig
• Webull
• Gemini
• Underdog Predict

The platforms were also directed to allow Connecticut customers to withdraw funds already held in their accounts. This is a critical point for users who may have money tied up in these platforms—they should be able to access their funds without penalty.

Why Connecticut Is Taking Action

State officials argue that sports prediction markets violate Connecticut gaming and unfair trade practices laws when offered without a state license. The state’s concerns include:

• Participation by people under 21: Prediction markets, unlike regulated casinos or sportsbooks, often lack robust age verification.
• Self-excluded customers: Individuals who have voluntarily banned themselves from gambling may still access these platforms.
• Markets involving Connecticut collegiate sports: Betting on in-state college teams is a sensitive issue in many jurisdictions.

Example: If you live in Connecticut and use Polymarket to bet on whether the University of Connecticut men’s basketball team will win a game, you are potentially violating state law. The state argues this is unlicensed gambling, not a legitimate financial contract.

Subpoenas: Beyond the Platforms Themselves

The DCP extended its enforcement beyond the prediction market platforms. It issued subpoenas to nine licensed gaming service providers, including:

• PayPal (payment processing)
• Plaid (financial data aggregation)
• LexisNexis (identity verification)
• Sportradar Solutions (sports data)
• Paysafecard (prepaid payment method)
• Genius Sports Media (sports technology)
• Genius Tech International (same parent as above)
• Integrity Compliance 360 (compliance services)
• Socure (digital identity verification)

Additionally, 15 subpoenas were issued to media organizations, including:

• ESPN
• Hearst Connecticut Media
• The Hartford Courant
• NBC Connecticut
• iHeartMedia

Technology giants were also targeted:

• Apple App Store
• Google Play
• Apple Pay
• Google Wallet
• Stripe

Important note: The DCP stressed that subpoena recipients are not under investigation themselves. Instead, the state is gathering information about how these platforms operate and who facilitates them.

Legal Context: The Broader Fight Between Connecticut and Prediction Markets

Connecticut’s enforcement actions deepen an ongoing battle. The state is currently:

1. Pursuing a lawsuit against Kalshi in court after a federal judge denied the exchange’s request for a preliminary injunction in August.
2. Involved in litigation against the Commodity Futures Trading Commission (CFTC) over regulatory authority.
3. Suing Coinbase over its prediction market offerings.

Why this matters: Prediction markets operate in a gray area. They claim to be financial markets (like futures contracts) regulated by the CFTC, while states like Connecticut argue they are simply unlicensed gambling. This week’s actions show states are willing to aggressively enforce their own laws, even against federally regulated entities.

Playtech H1 Revenue Rises 10% as North America Accelerates

Earnings Breakdown

Playtech reported revenue of €425.1 million ($493.2 million) for the first half of 2026, a 10% year-over-year increase from €387 million in 2025. Key highlights include:

• Regulated B2B revenue: Increased 21% on an underlying basis.
• Adjusted EBITDA: Jumped 77% to €162.5 million.
• U.S. and Canada revenue: Reached €56.9 million, representing 176% year-over-year growth in constant currency.

U.S. Business Turns Profitable

Playtech said its U.S. business is now profitable, a major milestone for a company that has invested heavily in the American market. The company highlighted specific partnerships driving growth:

• Fanatics: A rapidly growing sports betting operator.
• FanDuel: The largest U.S. sportsbook by market share.
• Bet365: A global giant expanding in the U.S.
• iPoker rollout with FanDuel: Playtech’s poker platform is now live with FanDuel, capturing a share of the growing online poker market.

Latin America Growth

Playtech also recorded strong results in Latin America with 29% underlying growth, led by Mexico and Colombia. Both countries have regulated online gambling markets that are expanding rapidly.

Why this matters: Playtech is a bellwether for the global gambling technology sector. Its strong North American performance suggests that regulated markets in the U.S. and Canada are becoming profitable for suppliers, not just operators. Investors should watch for similar trends from competitors like Evolution Gaming and Scientific Games.

FATF Flags Online Gambling Money-Laundering Risks

What Is the FATF?

The Financial Action Task Force (FATF) is an intergovernmental organization that sets global standards for combating money laundering and terrorist financing. Its recommendations carry significant weight with regulators worldwide.

New Red-Flag Indicators

The FATF published new red-flag indicators specifically for the gambling and gaming sectors. The organization said gambling-related money laundering is an “established risk across many jurisdictions” and that both online and retail casinos, as well as sports betting, are particularly exposed.

Online Gambling Red Flags

• Sudden changes in account activity: A user who bets small amounts for months suddenly deposits and wagers large sums.
• Difficult-to-establish sources of funds: The customer cannot explain where their money comes from.
• Multiple accounts linked to the same device: This suggests a single user is trying to bypass limits or hide identity.
• Repeated VPN use: Using virtual private networks to obscure location or identity.
• Transactions inconsistent with a customer’s financial profile: A low-income user suddenly bets thousands of dollars.

Sports Betting-Specific Indicators

• Wagering on every possible outcome: This ensures a small loss regardless of the result, which can be used to launder money by making funds appear as gambling winnings.
• Coordinated peer-to-peer activity: Multiple users betting in a way that guarantees a transfer of funds between them.
• Structured deposits below reporting thresholds: Depositing $9,900 repeatedly to avoid $10,000 reporting requirements.
• Low-risk bets used to justify withdrawals: Placing a few small bets to make a large withdrawal appear legitimate.
• Large deposits followed by little or no genuine gambling activity: The customer deposits a large sum, makes a few small bets, then withdraws most of the money.

Example: A money launderer deposits $50,000 into a sportsbook account, places a few $10 bets on heavy favorites, then requests a $49,970 withdrawal. To the casino, this looks like a customer who got bored after a few bets. But the FATF says this pattern is suspicious.

Implications for Operators

Online gambling companies must now:

• Strengthen their know-your-customer (KYC) procedures.
• Monitor for the specific patterns listed above.
• Report suspicious activity to regulators.
• Consider implementing AI-based fraud detection tools.

Kalshi Sued by Senate Candidate Who Wanted to ‘Get Caught’

The Case

Virginia U.S. Senate candidate Mark Robert Moran has sued Kalshi over a disciplinary case that resulted in:

• A five-year suspension from the platform.
• A $6,229.30 penalty.
• Disgorgement of trading profits.

What Happened?

Kalshi sanctioned Moran after he traded on a market tied to whether he would run for office. The exchange found that Moran was a “direct decision maker” with influence over the outcome—a clear violation of Kalshi’s rules, which prohibit trading on events you can influence.

Moran’s Defense: ‘I Wanted to Get Caught’

After Kalshi announced the enforcement notice, Moran said the trading was intentional. In a social media post, he explained that he bet on himself “because I wanted to get caught” to test Kalshi’s enforcement process.

His lawsuit alleges that Kalshi handled the disciplinary process in bad faith. Specifically, an earlier proposed settlement involved:

• An $800.15 payment
• A one-year suspension

This was later replaced with the harsher sanction, which Moran claims was arbitrary and unfair.

Why This Matters

This case highlights a key tension in prediction markets: How do you enforce rules against trading on inside information when the “inside information” is about yourself? Moran’s strategy was to deliberately break the rules to expose flaws in Kalshi’s system. If he wins his lawsuit, it could force prediction markets to rethink their enforcement procedures.

Polymarket Appoints First CFO

Who Is Warren Jenson?

Polymarket has appointed Warren Jenson as its first chief financial officer. Jenson’s resume is impressive:

• CFO of Amazon (during its early growth phase)
• CFO of Electronic Arts
• CFO of Delta Air Lines
• CFO of NBC

Role at Polymarket

Jenson will oversee:

• Finance (accounting, reporting, tax)
• Capital strategy (fundraising, treasury management)
• Long-range planning (strategic growth initiatives)

He will report to Polymarket founder and CEO Shayne Coplan.

Why Now?

Polymarket is rapidly expanding its U.S. operations and likely preparing for increased regulatory scrutiny and potential fundraising. Having a CFO with experience at major public companies adds credibility as the company navigates legal challenges like the Connecticut enforcement.

FanDuel Becomes Real App’s Exclusive Betting and Prediction Market Partner

The Partnership

Social sports platform Real App has named FanDuel as its exclusive sportsbook and prediction market partner. The integration will:

• Bring FanDuel odds and contextual markets into Real’s live game feeds.
• Display markets on player pages, box scores, and other in-game features.
• Allow eligible users to click through to FanDuel products.

Launch Timeline

The initial integration launches around the start of the NFL season, making it immediately relevant to football fans.

User Control

Betting features will be optional, and users can disable them in the app. This is important for attracting users who want sports content without gambling.

Why this matters: This partnership shows how sports apps are integrating betting directly into the fan experience. Instead of going to a separate sportsbook, users can bet on what they’re already watching. This is a growing trend, with competitors like DraftKings and ESPN Bet pursuing similar strategies.

DraftKings and Mindway AI Roll Out NFL-Themed Responsible Gaming Tool

What Is Gamalyze?

Gamalyze is a gamified responsible gaming tool that helps users examine their decision-making. Think of it as a self-assessment game that makes players reflect on their gambling habits.

American Football Version

DraftKings and Mindway AI are expanding their collaboration with a new American football version of Gamalyze, timed for the NFL season. Previously, the companies launched a soccer version during the FIFA World Cup.

Previous Integration

DraftKings first integrated Mindway AI’s Gamalyze Casino tool into its My Budget and Controls platform in January.

Why this matters: Responsible gaming tools are becoming more sophisticated. Instead of just setting deposit limits, users can now play a game that helps them understand their own behavior. This could be a model for other operators looking to improve their responsible gaming offerings.

Bally’s Plans Chicago Update After City Council Scrutiny

The Situation

Bally’s will hold a conference call on September 14 to provide an update on its Chicago casino project. This comes days after company executives faced questions from alderpersons over a slowdown in construction.

The $1.7 Billion River West Development

The project is a $1.7 billion development in Chicago’s River West neighborhood. However, Bally’s has slowed work on non-gaming portions of the project.

The Blame Game: Video Gambling Terminals

Bally’s has blamed a city proposal to legalize video gambling terminals (VGTs) in Chicago. The company argues that widespread VGTs would cannibalize casino revenue, making the project less viable.

Aldermen’s Concerns

City council members questioned:

• Are VGTs really the reason for the slowdown?
• What about Bally’s finances—is the company in trouble?
• Is Bally’s meeting its obligations under the city’s Host Community Agreement?

Why this matters: The Chicago casino was seen as a flagship project for Bally’s. If it stalls, it could signal broader problems for the company and for urban casino developments in general.

New York Skill-Game Group Challenges Liquor Authority Rule

The Lawsuit

The Amusement and Music Owners Association of New York (AMOA-NY) has sued the New York State Liquor Authority over restrictions on skill-based, coin-operated video poker machines.

What the Rule Does

The rule covers machines that award free or extended gameplay. The trade group argues that this restriction conflicts with New York law.

The Broader Legal Landscape on Skill Games

This case adds to the growing debate over skill games across the United States:

• Pennsylvania: The state Supreme Court ruled that certain skill game machines are gambling devices in June.
• Virginia, Kentucky, Missouri, Tennessee: Courts have reached similar conclusions.
• Texas: An appellate court found certain machines are not gambling devices. However, Attorney General Ken Paxton has said skill games are illegal if chance plays any role in awarding something of value.

Why this matters: The definition of “skill” vs. “chance” is critical for the entire gaming industry. If states continue to rule against skill games, it could force thousands of machines out of bars, truck stops, and convenience stores.

Weekly Prediction Markets Roundup: Court Battles Continue

Iowa: Kalshi Denied Preliminary Injunction

A federal judge in Iowa denied Kalshi’s request for a preliminary injunction, finding the exchange was unlikely to succeed on its argument that the Commodity Exchange Act (CEA) preempts state gambling laws.

Tenth Circuit: Another Setback

The same day, the Tenth Circuit Court of Appeals denied Kalshi’s emergency request for an injunction pending appeal in its Utah case.

Ninth Circuit: Rehearing Request

Kalshi also asked the full Ninth Circuit to rehear its August 28 ruling en banc (meaning all judges, not just a panel). This is a long-shot move, but the company is running out of options.

What This Means

Prediction markets like Kalshi are losing in court on the key question: Do federal laws preempt state gambling laws? So far, judges are siding with states like Connecticut, Iowa, and Utah. If this trend continues, prediction markets may need to seek a legislative solution or accept that they must obtain state gambling licenses.

Key Takeaways

Related guides

• $1.35B Mega Millions Winner Drops Lawsuit: The Cost of Anonymity in a Record Jackpot
• $167M Powerball Winner Arrested for Fifth Time: A Cautionary Tale of Sudden Wealth
• $20 Ticket Turns into a $2M Payout in Illinois
• $320M Powerball Hopeful John Cheeks Still Fighting for Website Error Jackpot: A Comprehensive Guide to the Ongoing Legal Battle
• $4.6M Child Modeling Fraudster Blew Stolen Cash on Gambling, Taylor Swift Tickets