Sporttrade Archives

Sporttrade, based in Philadelphia, wants to shift gears and take its sports betting exchange model nationwide under federal regulation. To do that, the company has formally asked the U.S. Commodity Futures Trading Commission (CFTC) for approval. CEO Alex Kane submitted the request on April 25 and explained that without this permission, the company could face what he called “irreparable harm.” Good to know Sporttrade has asked the CFTC to allow nationwide operations under federal oversight. It currently holds state licenses in Arizona, Colorado, Iowa, New Jersey, and Virginia. The company’s model works more like a financial exchange than a traditional sportsbook. Sporttrade runs a platform where users buy and sell contracts based on sports outcomes. Instead of locking in bets like you would on a sportsbook, you can trade in and out, much like you would with stocks or bonds. The company already operates with state gaming licenses in five states. But its leadership says it faces unfair disadvantages when competitors operate under federal rules and avoid state licensing altogether. “You’re not going to hear me say this isn’t sports betting,” Kane said in a recent interview. “That’s a ridiculous comment.” His point is clear — Sporttrade plays by the gaming rules, while others sidestep them. A different regulatory path than Kalshi One of Sporttrade’s key competitors, Kalshi, has opted to operate under the CFTC and does not label its offerings as sports betting. That decision has let Kalshi bypass state licenses, though it has drawn criticism from states like New Jersey and Nevada, which the firm now have sued even. Kalshi’s co-founder Tarek Mansour made the company’s position clear: “The CFTC is our regulator. If the CFTC tells us to stop, we will absolutely stop. If they don’t, then we won’t.” This is where Sporttrade sees a problem. According to Kane, operating under the state-by-state model while competitors scale through federal permissions is hurting their ability to compete. “Suffice it to say: it may take some time before the CFTC determines, one way or another, whether sports event contracts are expressly permissible,” he wrote in his letter to Acting Director Caroline Pham. What happens next? Sporttrade plans to submit a no-action relief request. This type of request outlines how the company will meet CFTC standards without being blocked from operating while a decision is made. Kane pointed out that the CFTC has granted similar relief in the past, which gives some hope that the commission might do so again. If approved, Sporttrade could become the first operator in the U.S. that meets both state and federal requirements for sports betting exchanges. Kane believes the CFTC could help create a more competitive market that feels more like financial futures trading than online casino regulation. “A CFTC-led regulatory approach for exchanges could foster a healthy and competitive environment,” he wrote. What are others saying? The situation has caught the eye of other sportsbook operators. Rush Street Interactive CEO Richard Schwartz said they are watching closely and would consider stepping into a federally regulated prediction market if the rules shift. Meanwhile, the CFTC has left both Sporttrade and Kalshi waiting. The agency recently canceled a roundtable on event contracts that many hoped would bring more clarity to the issue. Without it, both companies remain in a bit of legal limbo.

Sporttrade

Sporttrade Seeks Federal Approval to Expand Sports Betting Exchange