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Sports trading platform, armed with state licenses, seeks national authorization from the Commodity Futures Trading Commission (CFTC)
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Posted On: May 1, 2025, 02:43h.Last Updated On: May 1, 2025, 02:57h.
Alex Kane, Co-founder of Sporttrade, Tackles National Expansion Hurdles**First-ever sports-focused derivatives shop looks to operate nationally
To steer clear of what it refers to as "damaging competition," sports betting exchange behemoth Sporttrade is petitioning the Commodities Futures Trading Commission (CFTC) for a national approval to conduct business across the USA.
Since 2018, Sporttrade has dabbled in sports prediction markets in Arizona, Colorado, Iowa, New Jersey, and Virginia. Owing to these gaming licenses, it currently stands as the first prediction market to win state-level permits exclusively in the sports domain. On the other hand, other prediction market operators, such as the likes of Kalshi, diversify beyond sports and are safeguarded at the federal level via CFTC regulation.
In a letter penned to CFTC Acting Director Caroline Pham, Kane asserted that Sporttrade strives for a fair, level playing field, and evading Federal approval could leave them vulnerable to rivals who carry out national-scale sports prediction markets sans state-level gaming licenses.
"The regulatory landscape remains vague, and the question of whether sports-related contracts are permissible hinges on the interpretation of one agency as opposed to another, which may prolong uncertainty and adversely impact our growth in the market," wrote Kane.
Kane further expressed that Sporttrade is preparing to submit a formal no-action request detailing how the company can adhere to the CFTC's key prerequisites and reporting guidelines. According to Kane, the CFTC has granted "no action relief" to exchange venues to facilitate trades on event contracts without federal registration on a multitude of occasions.
Setting Sporttrade Apart from Kalshi and Others
Sporttrade lends itself to a traditional financial exchange model, empowering its clientele to engage in sports derivatives linked to sporting events in a manner analogous to stock trading. This allows users tooffload losing wagers and minimize losses in a way unattainable in conventional sports betting.
In contrast to Sporttrade, companies like Kalshi and upcoming national allies have ventured into the sports derivatives segment for some time now. They have offered event contracts for events that span across elections, economic data points, awards shows, and even the selection of the next pope.
What sets Sporttrade apart from its counterparts is its exclusive focus on the sports domain, while others are comparative newcomers to the sports derivatives space. Moreover, Sporttrade delivers open declarations about the product it offers being classified as sports gambling, a stance contrasting with the evasive assertions by Kalshi concerning its product. Owing to its business model, Sporttrade has actively pursued gaming licenses to secure regulatory approval — a move yet undertaken by Kalshi.
"The contracts we intended to feature would involve gambling aspects, thus necessitating us to abide by gaming regulations," Kane asserted, reminiscing about the company's early days. "The approach to market our product was somewhat restrictive, yet it aligned with feedback from every state gaming regulator we corresponded with."
Pros of CFTC Oversight for Sporttrade
shouldering oversight from the CFTC would yield various advantages for Sporttrade. Kane candidly acknowledged the benefits associated with such a transition. Acquiring nationwide approval would propel Sporttrade to a level playing field with heavyweights such as Kalshi, sans state-by-state restrictions.
Additionally, expanding its business on a national scale would offer a competitive advantage for Sporttrade in comparison to state-centric online sports betting, primarily dominated by two major operators. "Embracing regulation at the federal level would enable us to compete on a more even footing in a conducive and competitive market structure that resembles traditional futures trading," said Kane in his letter to Pham.
Philadelphia-based Sporttrade enjoys backing from some prominent investors, including Jump Capital, Delavan Lake Investments, Impression Ventures, Hudson River Trading, and Tower Research Ventures.
Sources:
[1] CNBC, Sporttrade Raises $15 Million to Develop Futures Market for Sports Betting, April 22, 2021, https://www.cnbc.com/2021/04/22/sporttrade-raises-15-million-to-develop-futures-market-for-sports-betting.html
[2] Forbes, Traditional Stock Market Platform’s CEO Launches Futures-Style Wagering On Sports, February 18, 2021, https://www.forbes.com/sites/mikeozanian/2021/02/18/traditional-stock-market-platforms-ceo-launches-futures-style-wagering-on-sports/?sh=439404da561a
[3] Coindesk, Sporttrade raises $40 million Series C to transform sports wagering market, February 13, 2023, https://www.coindesk.com/business/2023/02/13/sporttrade-raises-40-million-series-c-to-transform-sports-wagering-market/
- Sporttrade, seeking to avoid harmful competition, is requesting national approval from the Commodities Futures Trading Commission (CFTC) to operate across the USA, as it currently holds gaming licenses in several states.
- In a letter to CFTC Acting Director Caroline Pham, Alex Kane, Co-founder of Sporttrade, highlighted the importance of a fair, level playing field, expressing concerns about operating without federal approval.
- Sporttrade, unlike other prediction market operators, is focused solely on sports-related derivatives, distinctly classifying their product as sports gambling and pursuing gaming licenses accordingly.
- Should Sporttrade receive nationwide approval from the CFTC, it would position them on par with heavyweights like Kalshi, while also offering a competitive advantage over state-centric online sports betting.
- Philadelphia-based Sporttrade, backed by investors such as Jump Capital, Delavan Lake Investments, Impression Ventures, Hudson River Trading, and Tower Research Ventures, could see significant growth with federal oversight.
- This expanded business scope under CFTC oversight would enable Sporttrade to compete in a more even and competitive market structure, resembling traditional futures trading.