Philadelphia-based sports betting operatorSporttrade has asked the U.S. Commodity Futures Trading Commission (CFTC) for federal permission to expand its operations nationwide, arguing that the current regulatory framework gives competitors an unfair advantage and threatens its business with what it calls “irreparable harm.”
Founded in 2018, Sporttrade currently holds state gaming licenses in Arizona, Colorado, Iowa, New Jersey, and Virginia. The company now seeks to become the first sports-only derivatives platform regulated at both the state and federal levels. It submitted a formal request to the CFTC on April 25, according to CEO Alex Kane.
To avoid what it describes as potential irreparable harm, sports betting exchange operator Sporttrade is asking the Commodities Futures Trading Commission (CFTC) to grant it permission to operate across the US, Kane said in a letter to CFTC Acting Director Caroline Pham.
The company operates prediction markets through a model resembling financial exchanges, allowing users to buy and sell contracts tied to sports outcomes in a manner similar to trading stocks or bonds. This approach contrasts with traditional sportsbooks, where wagers are locked in once placed.
Sporttrade’s request highlights a growing debate over whether sports-related event contracts fall under the jurisdiction of state gaming regulators or the federal derivatives watchdog. While Sporttrade has pursued state licenses and describes its product as sports betting, competitors such as Kalshi operate under CFTC oversight and have avoided the betting label.
“You’re not going to hear me say this isn’t sports betting,” Kane said in an interview. “That’s a ridiculous comment.”
Kane argued that competitors operating under federal regulation are able to list similar products nationwide without acquiring state licenses, putting Sporttrade at a disadvantage.
“Suffice it to say: it may take some time before the CFTC determines, one way or another, whether sports event contracts are expressly permissible,” Kane wrote. “This uncertainty disproportionately harms Sporttrade in our attempt to fairly compete with federally regulated derivatives clearing markets (DCMs).”
In the letter, Kane said Sporttrade is preparing a formal no-action relief request that outlines how the platform can meet the CFTC’s core principles and reporting obligations. He cited past instances of the agency granting similar relief to exchanges listing event contracts.
Kalshi, one of Sporttrade’s chief competitors, has faced regulatory pushback from states such as New Jersey and Nevada for offering sports-related markets without gaming licenses. Nonetheless, Kalshi maintains that only the CFTC can prohibit its operations.
“The CFTC is our regulator. If the CFTC tells us to stop, we will absolutely stop. If they don’t, then we won’t,” Kalshi founder Tarek Mansour said.
If approved, Sporttrade could be the first operator in the U.S. regulated at both the state and federal levels. Kane said he does not expect retaliation from state regulators. “I know our regulators well,” he added.
The case has attracted the attention of other sportsbook operators. Rush Street Interactive CEO Richard Schwartz said his firm is “aware of all possibilities” and would consider entering the federally regulated prediction market if rules change.
“A CFTC-led regulatory approach for exchanges could foster a healthy and competitive environment, devoid of the monopolistic forces that dominate the state-by-state framework,” Kane said in his letter. Such a model, he argued, would encourage a market structure “that looks much more like futures trading than online casino regulation.”
The CFTC recently canceled a roundtable discussion on event contracts that was expected to provide greater legal clarity, leaving companies like Sporttrade and Kalshi in regulatory limbo.
Original article: https://www.yogonet.com/international/news/2025/05/02/103488-sporttrade-seeks-national-approval-from-cftc-amid-prediction-market-dispute
