Sporttrade Requests CFTC Approval to Launch Sports Prediction Markets

The controversial sports prediction market industry may be about to get bigger.

Sports betting operator Sporttrade has submitted a request to the Commodity Futures Trading Commission (CFTC) to launch its own sports prediction market platform. Since these controversial markets fall under the regulation of the CFTC instead of sports betting operators, they will have the final say on Sporttrade’s request.

While the sports betting industry has criticized sports prediction markets, the CFTC has yet to make a firm ruling on their future. As a result, Sporttrade created its prediction market.

The operator isn’t the first sportsbook to try to dip its toe into the merging industry. DraftKings is launching its own, named DraftKings Predict. 

Now, both operators will need to await word from the CFTC on their ability to launch their new platforms. The federal regulator was going to host a round-table discussion over the controversial markets this month, but it was postponed without much explanation. 

With Sporttrade also submitting a request, it could add pressure on the CFTC to make a firm ruling on the legality of these markets.

Many Dangers Loom Over CFTC Decision

With sportsbook operators now looking to expand into sports prediction markets, the equation is changing. Several states have sent cease-and-desist letters to operators like Kalshi, accusing them of violating their sports betting rules. However, the murky legal status has prevented them from being enforced in most markets.

The issue that responsible gaming advocates have with prediction markets is the rise in problem gambling. While the way these markets are set up doesn’t qualify as gambling, customers are still wagering money on sports events. With prediction market operators not sending tax revenue to states to fight this growing problem, they could be adding fuel to the fire.

There is also a growing concern over customers betting on sports using investment accounts, which would never be allowed in a regulated sports betting market. This could put them in severe financial danger, potentially affecting them for the rest of their lives.