U.K.-based Smarkets has applied to become a federally regulated prediction market exchange in the U.S.
London-based betting exchange operator Smarkets has taken a formal step toward launching a federally regulated prediction market platform in the United States.
A new filing posted to the Commodity Futures Trading Commission’s industry portal on March 4 shows Smarkets Board of Trade Exchange LLC applying to become a Designated Contract Market (DCM), the regulatory status that allows platforms like Kalshi, Crypto.com, and Polymarket US to offer event contract trading nationwide under federal commodities law. If approved, the designation would allow Smarkets to operate its own exchange and list markets tied to real-world outcomes.
Smarkets currently operates a peer-to-peer sports betting exchange primarily serving the U.K. Over the past year, CEO Jason Trost has signaled plans to bring the company’s exchange model to the U.S. through a CFTC-regulated platform.
Smarkets’ existing platform is heavily focused on sports. A U.S. version would likely offer a broader mix of contracts tied to political, cultural, economic, and other events. Smarkets’ U.K. platform already has a look and feel similar to U.S. prediction exchanges.
Smarkets CEO says sports, politics key to prediction market growth
In June of last year, Trost discussed his vision for the U.S. version of Smarkets on Eilers & Krejcik Gaming’s Zero Latency podcast. He said he began looking seriously into pursuing DCM status when he moved to the U.S. in 2017. Trost said at that time, offering markets for sports and politics was a “no go.”
“Without politics and without sports, event markets aren’t that interesting,” he said, adding that markets for things like the price of oil and Fed interest rate decisions weren’t real money-making opportunities. Trost said Kalshi “opened up the floodgates” when the platform began offering sports and political markets.
“Back in 2017, without politics, I thought it was not that interesting,” Trost said. “With politics, it’s 100% interesting, and with sports it’s a million percent interesting. So, with what Kalshi has done blowing the regulatory door open, it’s a no-brainer for us as a business to get a CFTC license.”
Trost also said there are plans to eventually make Smarkets more of a multi-asset trading platform, beyond event contracts.
“The long term vision for Smarkets is to turn it into a general trading platform,” he said. “So if you want to trade stocks, bonds, options, prediction markets, you can do that with Smarkets. And so the place we’re starting is the CFTC. Obviously we do sports in the U.K. and a few other countries already, but we want to turn Smarkets into a more generic trading platform for people.”
What’s in the Smarkets DCM filing
Smarkets’ filing materials outline the structure and operating rules for the proposed exchange, including how contracts would trade, clear, and ultimately settle.
Trading on the platform would take place through a central limit order book where participants submit bids and offers for event contracts tied to defined outcomes. The rulebook describes the contracts as binary event contracts that resolve to two possible outcomes, typically framed as “Yes” or “No.”
The documents also outline the clearing framework supporting the exchange. According to the filing, contracts traded on the platform would be cleared through Smarkets Board of Trade Clearing, which the materials describe as a fully collateralized clearinghouse responsible for clearing and settling trades. A separate application for the clearing entity has yet to appear in the CFTC’s Derivatives Clearing Organization (DCO) filings portal.
The rulebook further describes a market structure that includes intermediaries like futures commission merchants and introducing brokers that could route customer orders and clear resulting positions through the clearinghouse.
The filing also details the exchange’s market surveillance and recordkeeping systems. Smarkets says the platform will use automated monitoring tools to detect potential manipulation or other irregular trading activity, while maintaining a full audit trail of orders, modifications, and cancellations.
Finally, the rulebook lays out how contract outcomes would be determined. If questions arise over how a market should settle, an internal Outcome Review Committee would determine the final result based on relevant evidence.
Exchange-style sports betting platforms pursue DCM approvals
Smarkets’ application joins a growing group of pending DCM filings from companies with roots in exchange-style sports betting, reflecting a broader push by operators built around market-based sports betting models to seek federal approval for nationwide event-contract markets. While many of these companies currently focus on sports, the proposed exchanges would be able to list a much wider range of contracts upon approval.
One of the most prominent is Sporttrade, an exchange-style sportsbook where customers trade positions against one another through an order book rather than betting against a house. The company has filed applications to operate both a DCM and a DCO.
Novig, which operates a prominent sweepstakes-based peer-to-peer sports prediction platform, is pursuing a similar transition through a subsidiary called Ludlow Exchange, which entered the CFTC portal with its own DCM application.
Another entrant is ProphetX, which also runs a sweepstakes-based peer-to-peer sports betting exchange and has applied for DCM and DCO approval.
RSBIX represents a slightly different model. The venture has partnered with the U.K.-based real-money betting exchange Matchbook, whose technology would underpin the proposed U.S. platform. Matchbook is first launching a U.K. prediction market platform as a trial run ahead of the U.S. effort. The RSBIX filing was the earliest of the recent sports exchange applications to appear in the CFTC portal, first showing up last September.
DCM filings are only one path sports gaming companies are taking into the prediction market space. DraftKings, FanDuel, and Fanatics have all launched prediction-style platforms through partnerships, while daily fantasy sports operators Underdog and PrizePicks have also introduced event-contract trading products through similar arrangements.
Just this week, Betr, the sports betting startup co-founded by Jake Paul, announced a partnership with Polymarket to launch a prediction market product. Betr originally launched as a micro-betting-focused sportsbook and has since experimented with several alternative gaming formats as it expands beyond traditional wagering.
Federal guidance could shape the sports contract fight
Sports markets have become the center of an ongoing dispute between federal prediction market platforms and state gaming stakeholders, lawmakers and regulators, who argue that sports event contracts function as sports betting products subject to state licensing rules. Prediction market operators, meanwhile, say the contracts fall exclusively under federal CFTC oversight.
Even as sports contracts remain the most legally contentious segment of the prediction market industry, recent signals from the CFTC suggest the federal regulator may be moving toward a clearer framework for the products.
CFTC Chairman Michael Selig has repeatedly indicated the agency intends to defend its authority over prediction markets under the Commodity Exchange Act. In recent remarks and policy moves, Selig has emphasized that the commission has sole jurisdiction over event contracts.
The CFTC is also preparing near-term guidance aimed specifically at prediction markets that could arrive at any moment. Selig has indicated the agency plans to issue interpretive guidance clarifying the status of event contracts, ahead of a broader rulemaking process expected to establish more formal standards.
For the growing list of DCM hopefuls like Smarkets now sitting in the CFTC pipeline, clearer federal guidance on event contracts, particularly those tied to sports, could help reduce regulatory uncertainty and make it easier for new platforms to launch once approvals are secured.
Mike Breen
Mike Breen has been a professional writer and editor covering a wide range of topics for more than 30 years. He’s been a freelance gaming industry writer since 2020, reporting on sports betting, online casinos, and more for various Catena Media sites, and he began reporting on prediction market industry news in 2025 for Prediction News. Prior to that, Mike was a founding editor at his hometown altweekly newspaper in Cincinnati, Ohio, where he extensively covered local arts, music and news.Mike’s published writing has received recognition and several awards from organizations like the Society of Professional Journalists and the Association of Alternative Newsmedia.When Mike is not working, he enjoys playing and listening to music, attending comedy shows, watching movies, and spending time with his family and three cats.
