Underdog sues Connecticut

[vixen777]

SOURCE
Underdog has bitten another state, filing a federal lawsuit on Wednesday against Connecticut officials amid the state’s recent spate of enforcement actions against the prediction markets industry.

In Underdog’s complaint filed on Wednesday, Sept. 16, the operator asked the court to prevent Attorney General William Tong and the Connecticut Department of Consumer Protection (DCP) from “unlawfully” exercising state authority over Underdog’s event contracts.

The complaint asked for a declaratory judgment that Connecticut cannot apply state gaming laws to event contracts, as well as a permanent injunction preventing state authorities from enforcing any state laws related to gambling in relation to Underdog’s prediction markets. Underdog also wants the judge to block any efforts by Connecticut to regulate those products.

Tong took a dim view of the lawsuit in a statement provided to SBC Americas.

“This is nothing more than the recycling of failed arguments from other prediction markets,” Tong said. “Multiple courts have affirmed that sports event contracts are no different than Sports Betting and are not magically shielded by federal law.”

Underdog sues a week after receiving C&D​

Underdog filed its Sept. 16 complaint seven days after its Underdog Predict subsidiary was one of nine companies sent a cease-and-desist letter by the DCP. The regulator accused Underdog, as well as Novig, Polymarket, and ProphetX, of illegally offering sports-related prediction markets to Connecticut residents.

Underdog included its cease-and-desist letter as an exhibit in its lawsuit. In the notice, dated Sept. 9, DCP Director of Gaming Kristofer Gilman ordered Underdog to immediately end all advertising, promotion, and operation of sports event contracts within the state, as well as to allow all Connecticut residents to withdraw their funds.

Gilman said that if Underdog did not comply, it could face civil penalties under the Connecticut Unfair Trade Practices Act and potential criminal charges under state gaming law.

Connecticut also cast the net beyond exchanges by issuing almost 30 subpoenas to companies ranging from gaming service and data providers to media organizations and tech giants’ app stores, as it seeks to cut off prediction markets’ support system.

Underdog says it is clearly under threat​

Underdog cited Connecticut’s actions as proof that it faces the “imminent threat” that the state will try to apply Connecticut’s gambling and sports wagering laws against Underdog’s prediction markets. Underdog, like other prediction market platforms, maintains that sports event contracts are federally authorized under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC).