Peer-to-peer sports exchange ProphetX is seeking approval from the Commodity Futures Trading Commission (CFTC) so that it can launch its platform in all 50 states. ProphetX co-founder and CEO Dean Sisun confirmed to Bloomberg that the company has applied with the CFTC for approval to operate both a “full-scale exchange” and clearinghouse.
The move would be the latest pivot for ProphetX, which initially launched in 2022 as a licensed sports exchange in New Jersey, where it operated for two years. Last year, ProphetX relaunched using the sweepstakes model, which allowed it to initially operate in more than 40 states.
ProphetX is seeking to pivot and relaunch once again, this time to offer real-money trading on sports event contracts nationwide. The move comes as sports prediction markets have exploded at leading exchanges like Kalshi, accounting for the majority of record-breaking trading volume on the platform.
“Our goal has always been to build a transparent, compliant and innovative marketplace that treats sports outcomes with the same integrity and structure as any other asset class,” Sisun said in a news release. “Filing for DCM and DCO status is the next logical step in legitimizing the future of user-driven sports trading.”
ProphetX ready to launch as CFTC-compliant exchange platform
In seeking approval to operate as a full-service exchange and clearinghouse, ProphetX has filed with the CFTC to garner status as a Designated Contract Market (DCM) and a Derivatives Clearing Organization (DCO). Those are the designations that platforms from Kalshi and CME Group to Aristotle Exchange and Crypto.com have in order to facilitate nationwide prediction trading following CFTC regulations.
The company said in the release that, with CFTC approval, ”ProphetX intends to operate a vertically integrated marketplace that allows users to directly trade, clear, and settle event-based contracts under full CFTC oversight.”
ProphetX’s other co-founder, Jake Benzaquen, told Sportico that the company is already set up to launch as a CFTC-compliant prediction market platform.
“We believe that our underlying model and technology and liquidity that we have in place are basically ready to be operated under CFTC oversight,” Benzaquen said. “That’s obviously ultimately up for the CFTC to decide. But the way that we built our product, and the institutional grade liquidity that we have on the platform, we feel is ready to go and plug and play.”
ProphetX looks to become first sports-focused prediction platform with CFTC approval
ProphetX says that, with approval, the platform will become “the first regulated exchange and clearinghouse in the United States built specifically for sports-based event contracts.” But it could be beaten to the market by RSBIX, a sports-focused exchange founded by gaming lawyer Jeff Ifrah that will be powered by U.K. sports exchange Matchbook.
In the CFTC’s portal for DCM applicants, RSBIX is one of four entities whose 2025 filings are listed as “pending.” ProphetX’s application isn’t listed yet, but the CFTC hasn’t listed any filings since the government shutdown began on Oct. 1. Ifrah told Prediction News in September that he was hopeful that RSBIX would garner approval and launch “in six months time.”
Novig, a similar platform that launched as a sports-centric sweepstakes prediction exchange around the same time last year, announced in August that it is also seeking CFTC approval as a DCM.
DraftKings, FanDuel also entering prediction market space
Like Novig, ProphetX currently doesn’t allow users to win real money directly from successful sports prediction trades. Instead, users accumulate free (“bonus”) Prophet Cash through promotions and with the purchase of the free-to-play virtual currency, Prophet Points. Prophet Cash can be exchanged for cash prizes. Sweepstakes gaming has been under fire this year, with several states and tribes seeking to ban them for what they see as offering a workaround to evade local gambling laws.
Sports event contract trading on CFTC-approved platforms has also faced state and tribal legal challenges. Those challenges are currently tied up in the court system, but their eventual outcomes will likely determine whether some prediction market platforms will have to cease offering sports trading in certain jurisdictions.
Online sportsbooks and DFS platforms are also entering the CFTC-compliant prediction market fray. DraftKings CEO Jason Robins said they are planning to offer sports event contracts in the coming months through their new DraftKings Predictions product. And FanDuel CEO Amy Howe recently told InGame that the company is prepared to offer sports event contracts on its forthcoming prediction market vertical.
