3 Prediction Market Platforms Pull Sports Markets From Connecticut After Crackdown
Key Points
- Connecticut announced three of the nine prediction market companies targeted in September have stopped offering sports prediction market services in the state.
- State officials identified ProphetX, Gemini and Webull, although Webull says its other brokerage services remain available and ProphetX's reported withdrawal has been publicly disputed.
- The Department of Consumer Protection remains in communication with Polymarket, Coinbase, Crypto.com, Robinhood, Novig and Underdog.
- Connecticut's enforcement campaign reaches beyond the platforms themselves, with nearly 30 subpoenas issued across payments, data, app stores and media companies.
Connecticut's Sports Prediction Market Crackdown Starts Producing Withdrawals
Connecticut officials say their September enforcement campaign against sports prediction markets has produced its first operational pullbacks, with ProphetX, Gemini and Webull identified as companies that have stopped offering affected services in the state.
CT Insider reported this week that the Department of Consumer Protection considers the three companies to have complied with its push against sports event contracts. DCP Commissioner Bryan Cafferelli said in a statement that the enforcement had "sent a clear message," adding: "We will not tolerate illegal prediction market activity that preys upon the most vulnerable consumers."
The development follows Connecticut's September crackdown against nine prediction market companies. The orders instructed each company to stop advertising, promoting or offering sports event contracts and other forms of what the state considers unlicensed online gambling to residents.
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The Remaining Six Have Different Reasons to Fight or Comply
Connecticut is still communicating with Polymarket, Coinbase, Crypto.com, Robinhood, Novig and Underdog. None has been identified by the DCP as having made the same withdrawal, although their responses to the state are unlikely to follow a single pattern.
Robinhood, Coinbase and Crypto.com have established financial services businesses beyond prediction markets. Like Webull and Gemini, they have the option of restricting sports trading geographically while preserving their other products. For companies such as Novig and Underdog, whose prediction market offerings are more closely tied to sports, giving up that access could carry a greater commercial cost.
Polymarket presents another calculation. Its wider event-trading business gives it products beyond sports, but the company's ambitions in the U.S. market also create an incentive to resist restrictions that could spread to other jurisdictions.
The six companies must weigh the value of maintaining Connecticut access against litigation expenses, regulatory exposure and the precedent their responses might establish elsewhere. The fact that three operators have already pulled back strengthens Connecticut's negotiating position, but it offers little basis for predicting that the others will reach the same decision.
Connecticut Is Pressuring the Distribution Network Too
The cease-and-desist orders were only one part of Connecticut's strategy.
DCP also issued nearly 30 subpoenas seeking information from companies connected to the prediction market ecosystem. The list included payment providers, identity and compliance companies, sports data businesses, media organizations, app stores and digital payment services.
Those businesses were not accused of wrongdoing. Connecticut said they may possess information relevant to its investigation.
That approach gives the state leverage beyond direct enforcement against an exchange. Prediction market platforms still depend on payment rails, identity verification, app distribution, data feeds and customer acquisition channels. Regulatory scrutiny at those points can create operational friction even while the underlying jurisdictional fight remains unresolved.
Why This Matters For Bettors
For Connecticut bettors using these platforms, the immediate concern is what happens to their money and open positions. Stopping new sports trades is relatively straightforward, but customers also need to know whether existing contracts can be sold, how unsettled positions will be handled and when funds can be withdrawn.
Connecticut's orders require operators to permit withdrawals, although the companies have not publicly explained all the details of how affected accounts will be handled.
The withdrawals also mean fewer choices for bettors who used prediction markets to compare prices or trade out of positions before an event finished. Customers of licensed sportsbooks should see little direct impact. The restrictions are more consequential for 18-to-20-year-olds, who can access some prediction markets but are too young to legally bet with Connecticut sportsbooks.
As for the six companies still facing enforcement, expect different responses. Webull and Gemini can afford to lose a relatively small part of their broader businesses, while sports-focused operators such as Novig and Underdog have more reason to defend their market access. Underdog has already taken that fight to federal court. Other operators may decide that restricting one state's sports contracts is cheaper than years of litigation, but further withdrawals are far from certain.
The bigger concern for bettors is how unpredictable access could become. Connecticut has already persuaded some operators to restrict their products without securing a final court ruling on the underlying legal dispute. Other states may pursue the same approach, leaving customers with fewer available platforms and potentially more interruptions to their trading.
Until the courts establish clearer boundaries, bettors should pay close attention to state-specific restrictions, particularly when holding contracts that will take weeks or months to settle.
What Happens Next
The next signal will be whether more companies restrict sports contracts or whether additional operators choose litigation instead.
Underdog has already filed a federal challenge to Connecticut's enforcement, while the state's separate fight with Kalshi continues. Connecticut sued Kalshi in August seeking to block its sports contracts after a federal judge rejected Kalshi's attempt to stop state enforcement, and Kalshi appealed that ruling to the Second Circuit.
Those cases will carry far more legal weight than voluntary product withdrawals. In the meantime, Connecticut has demonstrated something more immediate for the market: state enforcement can affect what bettors are able to access before the nationwide jurisdictional fight reaches a final answer.
