ProphetX, Gemini and Webull leave Connecticut after prediction-market orders

ProphetX, Gemini and Webull have withdrawn their services from Connecticut after the state ordered nine prediction-market operators to stop offering sports-event contracts to residents.

CT Insider reported that the Department of Consumer Protection remains in contact with the six other companies named in the crackdown: Polymarket, Coinbase, Crypto.com, Robinhood, Novig and Underdog. Consumer Protection Commissioner Bryan Cafferelli said the state’s actions sent a clear message that it would not tolerate illegal prediction-market activity and expressed hope that the remaining firms would decide against targeting Connecticut consumers.

The pullbacks follow the Sept. 10 cease-and-desist campaign against nine platforms, as we reported at the time. The orders required the companies to stop advertising, promoting, offering or otherwise making available sports-event contracts and other unlicensed online gambling in the state.

Connecticut maintains that sports prediction markets are peer-to-peer exchanges where users trade yes-or-no contracts on sporting outcomes, and that this activity constitutes wagering under state law. The state says such markets violate its gaming and unfair-trade-practices laws.

Licensed wagering in Connecticut is limited to casinos, the Connecticut Lottery Corporation and their contractual partners. The state’s three licensed sports-betting platforms are DraftKings at Foxwoods, FanDuel at Mohegan Sun and Fanatics through the lottery.

Officials have alleged that the targeted markets accepted wagers from people under 21, offered bets on Connecticut college teams and made services available to people on the state’s voluntary self-exclusion list, which contains about 10,000 names. Connecticut requires participants in online or in-person gaming and sports wagering to be at least 21, and prohibits wagering on Connecticut collegiate sports.

The companies have contested the state’s premise. Polymarket has said prediction markets fall under a federal Commodity Futures Trading Commission framework rather than a patchwork of state rules, while Robinhood has said its event contracts are offered through CFTC-registered Robinhood Derivatives.

Connecticut’s enforcement action also included nearly 30 subpoenas to gaming-service-provider licensees and Connecticut media outlets. The state said the subpoena recipients were not themselves under investigation, but could have information relevant to the inquiry.

The state Legislature legalized sports wagering in 2021, authorizing internet lottery games and up to 15 lottery sports-betting locations alongside tribal casino operations. Gov. Ned Lamont said the law was intended to create a safely regulated market rather than an unregulated one.