- Sporttrade, a regulated sports betting exchange, recently petitioned the CFTC to offer sports prediction markets throughout the country
- Sporttrade is licensed and regulated in five states
- CEO Alex Kane says its necessary to avoid “irreparable harm” in letter to CFTC
Sporttrade, a regulated sports betting exchange, is hoping to expand its sports prediction market business across all 50 states.
Sporttrade CEO Alex Kane submitted comments to the Commodity Futures Trading Commission (CFTC) on April 25, expressing his desire that Sporttrade be allowed to offer sports prediction markets throughout the country in the same manner Kalshi, Crypto.com, and Robinhood do as well.
Sportico was the first to break the news.
Irreparable Harm to Sporttrade
With the presence of sports event prediction markets being offered by Robinhood, Crypto.com, and Kalshi, Sporttrade finds itself in direct competition with companies “offering the same exact products it offers” while not being held to the same regulatory standards, Kane wrote in his comments to the CFTC.
These exchanges are able to operate throughout the entire country through the oversight of the CFTC, while Sporttrade can only offer its similar product in its five licensed states. Sporttrade is licensed and regulated to operate in Arizona, Colorado, Iowa, New Jersey, and Virginia.
“Given the congruence, Sporttrade should be provided the opportunity to demonstrate its ability to operate on a level playing field with venues that now offer the same product nationwide to list for trading the same menu of sports contracts,” Kane wrote.
It would be a solution to keep the playing field level for all involved that are offering sports prediction contracts, Kane told Sports Betting Dime.
Kane claimed that no other venue outside of Sporttrade can ask for the same relief, as it’s the only exchange program that’s regulated on a state-by-state basis by gaming regulatory bodies. Each of the other regulated venues that offer sports betting are licensed sportsbooks, which offer a different product than Sporttrade.
The continued operation of companies offering sports event prediction contracts throughout the country “present irreparable harm to Sporttrade despite the relentless effort to operate our business in a legal and regulated fashion.”
“At the time of writing, Sporttrade is preparing a formal no-action relief request that in effect will demonstrate that Sporttrade can satisfy all core Principles and reporting requirements to list a small, select set of sports contracts that we can demonstrate are within public interest.”
CFTC Has Yet To Share Opinion on Markets
As certain state gaming regulators attempt to hold sway over the sports prediction prediction markets – while companies offering the markets insist its a federal issue – the CFTC has yet to offer an opinion on the issue.
The CFTC was originally going to address the topic during a planned roundtable this week, but abruptly cancelled the April 30 meeting. It gave no reason for the cancellation and has yet to reschedule.
The much-anticipated meeting was announced in February by the commission with the goal of developing “a robust administrative record with studies, data, expert reports, and public input from a wide variety of stakeholder groups to inform the Commission’s approach to regulation and oversight of prediction markets, including sports-related event contracts.”
The CFTC was expected to gather information from all parties involved in the sports event prediction markets and eventually release an opinion on the legality of the contracts. Several lawsuits have been filed by Kalshi in response to state cease-and-desist notices, as the company has said it will not stop offering the market unless directed to do so by the CFTC.
A number of state gaming regulators have been monitoring the sports event contract market since the likes of Kalshi, Robinhood, and Crypto.com began offering the new prediction markets in late 2024. At least six states have sent cease-and-desist notices to the companies to halt the trading of the sports event contracts, which they believe too closely mirror sports betting.
Several states are also monitoring the situation to see if any action is necessary.
Sporttrade, a sports betting exchange platform, has recently requested the Commodity Futures Trading Commission (CFTC) to allow for the creation of sports prediction markets for trading. This move could potentially revolutionize the way sports betting is conducted in the United States.
Currently, sports betting is limited to traditional sportsbooks where bettors place wagers on the outcome of sporting events. However, Sporttrade is proposing a new model where bettors can trade on the likelihood of certain outcomes happening in a sports event, similar to how stocks are traded on the stock market.
By creating sports prediction markets, Sporttrade aims to provide bettors with more flexibility and control over their bets. Instead of simply placing a bet on a team to win or lose, bettors can now trade on various outcomes such as the total number of points scored in a game, the performance of individual players, or even more obscure events like the number of yellow cards issued in a soccer match.
This new model could also potentially attract more sophisticated bettors who are interested in using data and analytics to inform their betting decisions. By allowing for trading on sports prediction markets, bettors can now use their knowledge and expertise to make informed decisions and potentially profit from their bets.
However, there are still regulatory hurdles that need to be overcome before sports prediction markets can become a reality. The CFTC, which oversees futures and options trading in the United States, will need to determine whether sports prediction markets fall under its jurisdiction and if they comply with existing regulations.
Despite these challenges, Sporttrade’s request for the creation of sports prediction markets is an exciting development in the world of sports betting. If approved, this new model could open up a whole new world of possibilities for bettors and revolutionize the way sports betting is conducted in the United States.