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Sleeper Markets, the prediction market arm of fantasy sports operator Sleeper, is pushing back against federal regulators after claiming its licensing process was improperly stalled. The dispute has now reached the Office of the Inspector General (OIG) as Sleeper looks for answers.
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In a letter made public by Milbank Partner Joshua Sterling, who represents Sleeper Markets, the company accused the Commodity Futures Trading Commission (CFTC) of breaking federal law by stopping the application from moving forward at the National Futures Association (NFA). Sterling released the letter on social media to make the dispute public. Sterling wrote:
“In light of our understanding for the reason for the delay of a complete and satisfactory application, and the lack of engagement by the commission, we are deeply concerned that the CFTC is arbitrarily and capriciously exercising its power to obstruct a timely issuance of Sleeper’s license in a manner that flagrantly violates the CEA.”
He went further, warning:
“If this is as far as the misconduct goes, it is bad enough. But we are concerned that this kind of misconduct may be more widespread.”
Sterling described the regulator’s handling of the filing as an “illegal delay” and urged the OIG and U.S. Department of Treasury to investigate. He also argued the CFTC has “no discretion to delay approval of materially complete FCM applications.”
According to Sleeper’s position, the Commission’s refusal to advance the filing prevents the company from completing the process required under the Commodity Exchange Act (CEA).
Approval would give Sleeper Markets the ability to partner with a designated contract market and begin offering sports event contracts. Such contracts let users buy and sell positions tied to outcomes of games and competitions, putting Sleeper closer to blending futures trading and fantasy sports.