Prediction markets begin responding to Connecticut crackdown
Several prediction-market businesses are considering withdrawing services from Connecticut after the state issued cease-and-desist orders against nine companies it accuses of offering illegal gambling.
Novig, ProphetX, Gemini and Webull have responded to the Connecticut Department of Consumer Protection and are discussing their next steps with the regulator.
Five others — Polymarket, Coinbase, Crypto.com, Robinhood and Underdog Predict — had not responded to the department as of September 15.
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Connecticut issued the orders on September 10 as part of one of the broadest state enforcement actions yet against prediction markets.
The state also issued nearly 30 subpoenas to gaming service providers and Connecticut media businesses as investigators examine the wider infrastructure supporting the platforms.
Businesses receiving those subpoenas are not themselves necessarily under investigation.
Connecticut Consumer Protection Commissioner Bryan Cafferelli said discussions had begun with companies that responded.
“We have received a handful of responses to our actions last week to enforce Connecticut gaming and unfair trade practices laws against prediction markets,” he said.
“We are working with those who have responded on next steps.”
Connecticut argues that sports-event prediction markets bypass the state’s licensed sports betting system, which operates through partnerships involving Fanatics and the Connecticut Lottery, DraftKings and Foxwoods Resort Casino, and FanDuel and Mohegan Sun.
The state has also raised player-protection concerns, including allegations that prediction markets may allow participation below Connecticut’s legal sports-betting age and solicit people appearing on the state’s voluntary gambling self-exclusion list.
Prediction-market operators maintain that event contracts offered through federally regulated entities fall under the Commodity Futures Trading Commission rather than state gambling regulators.
That jurisdictional argument is now playing out across numerous states and federal courts, with Crypto.com and Robinhood separately asking the US Supreme Court to review the issue.
