Just months after relaunching a revamped U.S. platform with a focus on sweepstakes, ProphetX is looking to pivot again. This time, it wants to start offering sports event contracts.
The peer-to-peer sports betting exchange-turned-sweepstakes platform has filed with the Commodity Futures Trading Commission (CFTC) to become a federally regulated prediction market platform. And while other such platforms tend to offer markets on a range of real-world events, ProphetX has its eyes firmly focused on the sports opportunity.
ProphetX said in a release that if it is approved, it would become the first regulated exchange and clearinghouse in the U.S. that is built specifically for sports-based event contracts.
An all-in-one sports marketplace
The company is seeking dual registration as a Designated Contract Market (DCM) and a Derivatives Clearing Organization (DCO), similar to the status held by the likes of Kalshi and Crypto.com. Getting such approval would allow it to offer as a single-platform nationwide contract market.
“ProphetX intends to operate a vertically integrated marketplace that allows users to directly trade, clear and settle event-based contracts under full CFTC oversight,” said the company.
Unlike those DCMs, ProphetX seems to have no interest in offering trading on anything other than sports. It also proposes establishing a Request for Quote (RFQ) mechanism which Co-Founder and Chief Marketing Officer Jake Benzaquen called “a fundamental innovation.” The RFQ would let users combine contract outcomes before trading them, something that could be used to essentially mimic a parlay wager.
“Our goal has always been to build a transparent, compliant and innovative marketplace that treats sports outcomes with the same integrity and structure as any other asset class,” said its CEO and Co-Founder Dean Sisun. “Filing for DCM and DCO status is the next logical step in legitimizing the future of user-driven sports trading.”
ProphetX expects the CFTC’s regulatory review process will not be completed until sometime in 2026.
Sweeps opportunity not what it once was
This would be the second major change to ProphetX’s operations in the space of a few months. Earlier this year, the company announced it was diverting from its life as a peer-to-peer sports betting exchange to offer dual-currency games that allow users to win prizes with cash value.
The company was previously operational as a P2P sports betting exchange in New Jersey before it shut down its operations in the Garden State in June. Via its shifted sweeps model, it has been operating in dozens of states across the U.S., including the likes of California and New York.
However, the opportunities presented to sweepstakes gaming operators have dwindled throughout 2025, with numerous states including both California and New Jersey banning the vertical. Regulators in numerous other states have pursued enforcement against sweeps, and suppliers and operators alike have pulled out of some jurisdictions under the intense spotlight.
Just last week, Google changed its advertising policies to render sweepstakes ineligible for certification, another body blow to the vertical.
Pick your battles
Prediction markets have arguably surpassed sweeps as public enemy number one for some state regulators, with a raft of jurisdictions sending cease-and-desist orders to operators including Kalshi and Crypto.com, court battles raging in states including New York and New Jersey and now lawmakers beginning to make efforts to ban some sports contracts.
However, as prediction market operators continue to insist that the CFTC’s federal oversight pre-empts state gaming laws, major sportsbooks including FanDuel and DraftKings have taken firm steps towards offering event contracts. DraftKings confirmed last week that it plans to offer sports trading in some states.
By moving from sweeps towards sports event contracts, ProphetX appears to be signaling that it feels prediction markets are on safer ground.
