This article is from the Amiga CD32 FAQ, by Stuart Tomlinson with numerous contributions by others.
A: There are rumours of being able to daisy-chain 8 or even 16 CD32 joypads together, but nothing's been seen.
What will work is if you connect some kind of interface that gives you a parallel port (eg. SX-1) and plug in an Amiga four-player adaptor in there.
The good point is that you can play the Amiga version of Dynablaster, if you have a floppy drive.
The bad points are that it's a bit expensive and CD32 joypads won't work when plugged into the four player adaptor (but they still work if you plug them into the side controller ports).
 
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