Novig and ProphetX are shifting from sweepstakes sports betting to federally regulated prediction markets. The migration is driven by state crackdowns that have eroded the broad U.S. access that made the sweepstakes model attractive. Sports event contracts are now facing similar pushback from some states.

The sweepstakes-to-prediction-markets migration could flood regulated venues with new entrants and users, but the parallel state pushback against sports event contracts shows the pivot may not escape regulatory pressure.