Three Prediction Market Operators Exit Connecticut After Crackdown

Three of the nine prediction-market companies Connecticut ordered to stop taking sports wagers from state residents have shut down their operations in the state, consumer protection officials confirmed Monday, giving regulators their first concrete measure of how a cease-and-desist campaign is landing.

ProphetX, Gemini and Webull have withdrawn their services, Department of Consumer Protection Commissioner Bryan Cafferelli said. The agency remains in communication with the six others it targeted in September: Polymarket, Coinbase, Crypto.com, Robinhood, Novig and Underdog.

"Our actions sent a clear message," Cafferelli said. "We will not tolerate illegal prediction market activity that preys upon the most vulnerable consumers. Three prediction market operators heard that message and are leaving our state accordingly. We are hopeful the rest will decide targeting Connecticut consumers isn't worth breaking the law."

Nine orders and nearly 30 subpoenas

The department issued cease-and-desist orders to all nine platforms on Sept. 10, arguing that "sports event contracts" amount to unlicensed sports betting. Connecticut allows wagering only through its two tribal casinos, the Connecticut Lottery Corporation and their contractual partners, all of which hold state licenses.

The orders required the platforms to immediately stop advertising, offering or promoting sports event contracts to state residents and to let customers withdraw any money still held on the platforms. Failure to comply could draw civil penalties under the Connecticut Unfair Trade Practices Act or criminal penalties under state gaming statutes.

At the same time, the department issued nearly 30 subpoenas — nine to gaming service provider licensees including PayPal, LexisNexis, Plaid and Paysafecard, and 15 to Connecticut media organizations. Officials said those businesses are not under investigation but may hold information relevant to the inquiry.

The self-exclusion list at the center of the case

Connecticut's complaint rests on three sets of alleged violations: unlicensed wagering, bets on Connecticut college teams — barred under state law to shield student athletes from harassment and influence — and wagers accepted from prohibited customers, including people under the legal betting age of 21 and people who placed themselves on the state's voluntary self-exclusion list.

Cafferelli said advertising from the platforms had reached people on that roughly 10,000-name list, which problem gamblers use to bar themselves from betting. The detail is what turns a licensing dispute into a public health question: self-exclusion is one of the few tools available to someone trying to stop gambling on their own, and it depends on operators honoring it.

"Gambling is a form of entertainment for many, but it is important to remember that all gambling carries risk, and for some, that risk can become a serious problem," said Nancy Navarretta, commissioner of the Connecticut Department of Mental Health and Addiction Services. The agency runs a statewide network of prevention, treatment and recovery services for gambling disorder and operates a problem gambling helpline at 1-888-789-7777.

Diana Goode, executive director of the Connecticut Council on Problem Gambling, praised the enforcement effort, saying that when operators work outside the state's regulatory framework, "critical protections can be lost."

A market growing faster than the rules

The stakes are rising as the prediction-market industry scales. The American Gaming Association estimates $40 billion will be wagered on the NFL through prediction markets this year, and the governor's office said one platform reported nearly $250 million in trading volume on college football alone on the first day of the 2026 season.

The platforms argue they are not sportsbooks at all. All nine state on their websites that they are prediction-market firms operating under federal rules, a position that has produced a widening state-versus-federal fight over who regulates event contracts. Connecticut has filed a separate lawsuit against the largest of them, Kalshi, after the state's gaming division issued cease-and-desist orders in December. Kalshi countersued, lost in federal court and has appealed to the Second Circuit Court of Appeals in New York.

Connecticut's approach follows similar actions in other states. New York's attorney general and governor sued Kalshi in August seeking up to $36 billion in penalties and restitution, and a coalition of lawmakers and advocacy groups has been pressing Congress for federal standards on sports betting advertising and AI-driven promotions. The enforcement wave has not settled the underlying legal question of whether event contracts are financial products or wagers — only who has to defend the answer in court.

What the crackdown means for treatment

Connecticut officials framed the enforcement action as consumer protection first, noting the volume of personal and financial data platforms collect. For people already struggling with gambling, the practical effects run in both directions. Money held on platforms that exit the state becomes withdrawable rather than stranded, and fewer unlicensed operators means fewer places to bet without age or self-exclusion checks — but the demand that drove the growth does not disappear with the apps.

Treatment for gambling disorder typically combines behavioral therapy with financial counseling and, in some cases, medications, and the National Problem Gambling Helpline at 1-800-522-4700 operates around the clock.

The six remaining companies have not said whether they will follow ProphetX, Gemini and Webull out of Connecticut. Cafferelli said the department is still talking to all of them.