ProphetX believes it has discovered a solution to the rapidly worsening financial issue, and it is wagering that the Commodity Futures Trading Commission will concur.
Instead of navigating state-by-state gaming restrictions, the sports betting website has filed to become a federally regulated prediction market exchange, allowing it to operate nationwide under the CFTC’s jurisdiction.
In an interview with InGame, Jake Benzaquen, co-founder of ProphetX, stated, “We’re looking to take our prediction market and have it regulated by the CFTC, moving from the current sweepstakes vertical we operate in to one under CFTC oversight.” “We plan to collaborate with employees over the coming months and into 2026 to make our prediction market accessible in all 50 states.”
The timing is not accidental. In 2025, sweepstakes operators have seen a significant reduction in their regulatory runway. Google terminated ad certification for sweepstakes applications, California became the most recent state to outlaw the model, and major platforms withdrew from important markets due to pressure from regulators who contend that the “free-to-play” model is simply gambling by any other name.
Prediction markets, on the other hand, are undoubtedly improving despite their own legal disputes.
The change is more than just regulatory arbitrage for ProphetX. According to Benzaquen, the company’s six-year focus on sports markets sets it apart from platforms that began with pop culture or elections before adding sports.
“We’re taking our sports platform and adapting it to the CFTC framework, while many of the new entrants are adapting their platforms to sports,” he stated.
Although Benzaquen doesn’t anticipate approval before 2026, the company has already started working with CFTC employees. In the meanwhile, ProphetX will still function as a sweepstakes platform.
He stated, “We’ve submitted our applications, but that doesn’t mean we’ve gotten licenses yet.” “We’re already collaborating with the CFTC; we’re meeting with them to present our team and business.”
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