Sleeper cleared a major hurdle in the company’s efforts to enter the prediction market space.
The Las Vegas-based company has been approved by the National Futures Association (NFA) to operate as a futures commission merchant (FCM) and a swap firm through an affiliated entity. The entity, Sleeper Markets LLC, is listed as an inactive member but has garnered NFA approval after submitting its registration in May 2025. Since then, Sleeper’s path to becoming an event contract provider has hit several hurdles.
The company’s NFA registration listed co-founder Nan Wang as the CEO of the entity, with fellow co-founder Weixi Yen serving as the head of the business unit for the forthcoming platform. Sleeper majority owner Blitz Studios, Inc. is also included in the registration.
Sleeper’s registration as an FCM allows the company to provide event contract trading markets to consumers but it cannot supply the offerings, which is the responsibility of designated contract markets (DCM). FCMs currently operating in the U.S. include FanDuel Predicts and PrizePicks, which provide event contracts supplied by registered DCMs. Companies like Kalshi, Crypto.com, CME Group and Polymarket are active DCMs.
CFTC ordered NFA to withhold Sleeper’s application
The Commodity Futures Trading Commission (CFTC) serves as the regulator of event contract trading in the U.S. and Sleeper previously took issue with its processes.
Last September, legal counsel for Sleeper sent a letter to the Office of the Inspector General for both the CFTC and the U.S. Department of the Treasury. The letter accused the CFTC of denying Sleeper’s application to register as an FCM with the NFA. The letter was sent following a lack of communication between Sleeper and the CFTC after Sleeper sent a formal letter to former CFTC Acting Chair Carolina Pham asking for NFA approval.
The CFTC instructed the NFA to withhold Sleeper’s application, with Sleeper claiming the CFTC did so without explanation and contested that the CFTC has “no discretion” to delay FCM approvals. Sleeper claimed it was entitled to register for approval as an FCM under the Commodity Exchange Act and that its application being withheld hindered competition.
The company’s letter requested an investigation into the CFTC’s blockage.
Sleeper responds with lawsuit
Sleeper responded to the CFTC blocking its NFA application by filing suit in DC District Court, alleging the CFTC violated the Fifth Amendment and the Administrative Procedures Act. It argued that the CFTC could not intervene and review an NFA application until it had been approved by the association, violating due process. Sleeper made the argument after the NFA informed the company that it would garner approval.
Lawsuit dropped after NFA approval
Sleeper decided to dismiss its legal action against the CFTC after the NFA approved its registration as an FCM and swap firm. Sleeper dismissed the suit without prejudice, meaning the company has the opportunity to reassert claims against the CFTC in the future. Sleeper joins Underdog as a sports-related brand to gain NFA approval in 2026.
Earlier this week, Underdog was also approved as an FCM and swap firm. The company is poised to make significant investments in the prediction space after shuttering online sports betting operations last month to place its focus on event contracts.
Underdog has been offering event contracts through a technology deal with DCM Crypto.com. The company can now extend its reach to other partners in the space.
