Sporttrade is seeking permission from the Commodity Futures Trading Commission (CFTC) to offer event contracts to customers across the country.
According to an exclusive Sportico report (paywalled), Sporttrade has sent a letter to the CFTC asking for authorization to provide its sports event contracts to avoid “irreparable harm” as it competes against other prediction market platforms in the U.S. Sporttrade provides its event contracts to customers in Arizona, Colorado, Iowa, New Jersey and Virginia.
The Philadelphia-based company holds gaming licenses in those markets allowing it to offer online sports betting. Sporttrade most recently launched sports betting in Virginia through a deal with the Quechan Indian Tribe of the Fort Yuma Indian Reservation.
Sporttrade is aiming to grow its event contract business with the backing of the CFTC.
It is asking the CFTC for permission to offer event contracts without federal registration allowing it to compete with other prediction markets, like Kalshi, that operate in all 50 states.
Sporttrade is making a case for its event contracts as CEO Alex Kane believes that prediction markets offer a more transparent experience than sportsbooks, per an X post.
The company must complete a series of tasks to gain approval from the CFTC.
Sporttrade is required to register with the CFTC and become a member of the National Futures Association. The CFTC will ensure Sporttrade complies with its regulations before a final review and approval. Sporttrade is also subject to background checks and ongoing supervision.
Sporttrade’s competitor is shrouded in controversy
Kalshi is currently embroiled in a legal dispute regarding its offerings.
Earlier this year, Kalshi filed a suit in Nevada after the state’s gaming regulator sent the company a cease and desist order for offering sports-related event contracts in the state.
The regulator sent the order arguing that its event contracts are similar to illegal wagering.
Kalshi requested a restraining order and a temporary injunction to keep its event contracts online after filing the suit against Nevada’s gaming regulator. Earlier this month, a Nevada judge granted Kalshi ‘s temporary restraining order allowing it to offer sports contracts.
The Nevada Gaming Control Board responded to Kalshi’s suit by filing a motion to dismiss. Kalshi is also suing gaming regulators in New Jersey and Maryland over sports contracts. In New Jersey, a judge also ruled in Kalshi’s favor allowing it to operate in the state are receiving a cease and desist letter.
CFTC cancels roundtable to discuss prediction markets
Sporttrade has submitted its request to the CFTC after the commission canceled a scheduled roundtable to discuss the legality of sports-related event contracts.
The roundtable was intended to provide a forum for regulators, advocacy groups, tribes and members of the gaming community to share their thoughts on event contracts.
The roundtable was slated to include the American Gaming Association, which submitted a written request to the CFTC to have a seat at the now-canceled discussion. It is unclear whether the CFTC will reschedule the roundtable on prediction markets.
