ProphetX is close to becoming a federally regulated prediction market. As to how close, co-founder Jake Benzaquen won’t say exactly.
“On the record, I can say that we are at the goal line,” said Benzaquen, the company’s chief commercial officer.
ProphetX has been working with the CFTC for more than seven months, through government shutdowns and changes at the top of the regulator. Benzaquen called the agency a good partner and said the company expects to go live very soon. Asked whether ProphetX would be up and running by NFL kickoff, he said yes.
“Oh yeah, 100%.”
The company has changed shape a few times. Born as Prophet Exchange in 2018, it became a regulated peer-to-peer sports betting exchange in New Jersey. Then came the wind-down, followed by the ProphetX rebrand and sweepstakes pivot in 2024. Now, a CFTC license is the next move, and a full prediction market site — both B2C and B2B — awaits.
While this may seem like a company that’s floundering for a spot in the world, Benzaquen sees it differently, pointing to the timing of it all.
“We were actually too early,” he said. “If you look back in hindsight, we chose the wrong regulatory vertical, and that had a lot of downstream effects.”
Nobody could have known the CFTC would end up regulating sports contracts, he said, and he thinks the company is where it should be even after arriving late.
“We’ve got a lot of deep expertise on sports markets, on sports liquidity, on sports infrastructure,” he said.
Kalshi who?
That experience, Benzaquen said, points to a strategy that is breaking from the rest of the field. ProphetX is not planning to spend against Kalshi, Polymarket, and newer entrants on customer acquisition.
“We’re billions of dollars behind, and a year behind some of the incumbents,” he said. “So trying to beat them at their own retail acquisition-focused game is a fool’s errand.”
Instead, the company is aiming at a narrower customer base — the trader and the sharp rather than the casual bettor.Â
“We’re aiming to be the F1 of the space,” Benzaquen said.
The bigger focus, he said, is business to business. ProphetX wants to be the back end other operators run on, the way Kalshi sits behind Coinbase and PrizePicks.
“For all those companies that view Kalshi as a frenemy, someone that they need right now but are a competitor long term, we can power their back end just as well, if not much better than Kalshi can,” he said. “We want to be the predominant B2B player in this space over the long term, and that is our No. 1 goal right now.”
He said the company has signed deals already, with more in the pipeline.
On the RFQ side, Benzaquen said the parlay product is where ProphetX has put the most work. Add a leg to a slip and the selection goes out to every market maker on the company’s API, each with milliseconds to quote and no view of what the others are bidding.
“It is a blind auction,” Benzaquen said. “Everyone’s just competing in their own little silo, and we show the best price to the consumer.”
When the license comes through, the sweepstakes elements will come off the app right away. The fuller redesign, Benzaquen said, will arrive before football season.
And with it, Benzaquen and crew hope that they’ve found the final form for this upstart company.
