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ProphetX is seeking to change how users trade outcomes on live sporting events. The company has filed paperwork with the U.S. Commodity Futures Trading Commission (CFTC), aiming to operate as a federally regulated prediction platform rather than a sweepstakes-style betting site.
Good to Know
ProphetX is requesting authorization to register as both a Designated Contract Market (DCM) and a Derivatives Clearing Organization (DCO). That setup would allow users to trade contracts directly on the platform and settle them within the same system. If approved, ProphetX could become the first CFTC-licensed market tailored exclusively to sports outcomes.
The move comes as various state regulators place pressure on sweepstakes operators that resemble betting platforms. Federal authorization would remove the requirement to comply with each individual state’s gaming rules, provided the platform meets its obligations under federal law.
CEO and co-founder Dean Sisun said:
“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. Filing for DCM and DCO status is the next logical step in legitimizing the future of user-driven sports trading.”
The company also highlighted a Request for Quote (RFQ) parlay-style tool included in the application. The feature would let users combine multiple contract outcomes into one trade and negotiate pricing among participants, similar to institutional trading behavior.
Co-founder and CMO Jake Benzaquen explained:
“The RFQ Parlay Mechanism is a fundamental innovation. It allows for dynamic price discovery and efficient multi-leg exposure – features that have long existed in traditional markets but are entirely new to the sports derivatives domain.”
If approved, ProphetX would gain access to regions such as California and Texas, where state-regulated sportsbooks currently do not operate. The company noted that it does not expect a decision until 2026, with the review timeline also affected by the ongoing federal government shutdown.
It aims to operate as a federally regulated exchange where users trade outcome contracts rather than placing traditional wagers.
It allows multiple sports outcomes to be bundled into one trade, with pricing determined between counterparties.
CFTC oversight would allow national operation without navigating individual state licensing requirements.
The company anticipates 2026, partly due to regulatory review delays.