Betting exchange Sporttrade has submitted its application to become a registered prediction market with the Commodity Futures Trading Commission (CFTC).
Sporttrade submitted documents to become a designated contract market (DCM) — the same status as prediction markets like Kalshi and Polymarket’s U.S. site — last week, per its filing, and they were published by the CFTC Wednesday.
Sporttrade founder Alex Kane has made no secret of his company’s plans to apply to be a DCM, but the process of completing the application before it could be submitted took months. The business is currently licensed to offer sports betting in Arizona, Colorado, Iowa, New Jersey, and Virginia, but Kane has argued that the state licensing system is ill-suited for low-margin exchange-style businesses, as taxes and regulatory requirements make it too difficult to turn a profit.
Sporttrade had previously considered no-action relief, which would have allowed it to operate without formal approval, before deciding to submit an application for full registration instead.
DCM applications have often taken years to be approved, with Railbird and QCEX both applying in 2022 and only receiving approval in 2025. However, there was a sign earlier this week that approvals may now be faster. XChange Alpha won DCM approval 204 days after it submitted its application. XChange Alpha’s chief legal officer wrote on LinkedIn that the business plans to offer “traditional futures,” but the demand for DCM status means that the business could be acquired by a company looking to offer prediction markets.
A number of other businesses have recently applied for DCM status. Firms with applications recently added to the CFTC’s list of applicants include Juice Exchange, Water Street Labs, and Optex Markets, as well as sweepstakes–based betting exchange Novig, which applied under the name Ludlow Exchange in January.
Sporttrade also applied to be a designated clearing organization (DCO), which would allow it to handle the paperwork and move the funds associated with event contract trades for its own exchanges or for others.
The news of Sporttrade’s application was first reported by Sportico.
Fine line between betting and prediction markets
Speaking on a New Normal webinar, attorney Daniel Wallach said the application by a company that is also a licensed sports betting operator shows that the distinction between sports betting and prediction markets does not come with a real difference in terms of product.
“One of the biggest mischaracterizations, misnomers that Kalshi and others in their space have advanced is the fact that it’s an exchange means that it’s a distinction with a difference, when sports gaming laws have long recognized that peer-to-peer and exchanges are, in fact, a form of gambling,” he said.
Wallach also noted that, had Sporttrade’s team been aware that the CFTC would allow sports event contracts nationwide, the business could have been as large as Kalshi is today.
“If [Kane] could go back in time, he would have been Kalshi today. He would have been Kalshi and Polymarket combined,” Wallach said.
On Wednesday, the CFTC also withdrew a guidance letter that the CFTC had issued to companies involved in prediction markets last year, where it told those businesses to have plans in place in case states succeed in their efforts to ban sports event contracts, as well as withdrawing a proposed rule that would have banned sports and political event contracts.
Last week, CFTC chair Michael Selig said he would withdraw the letter and the rule proposal. He also said he would direct the regulator to write new rules for event contracts, and get involved in court battles over their legality.
