ProphetX has received approval from the Commodity Futures Trading Commission to operate as a federally regulated sports-focused exchange in the United States.

The New York-based company said the regulator approved its applications to register as both a Designated Contract Market (DCM) and a Derivatives Clearing Organization (DCO). Those approvals give the company a path to launch a prediction market platform where users can trade event-based contracts under a federal regulatory structure.

ProphetX becomes the US’s first regulated sports exchange

With the approvals in place, ProphetX said it plans to operate as a direct-clearing prediction market. Users would be able to trade, clear and settle contracts through the company’s platform rather than relying on a separate clearing arrangement.

“This approval positions ProphetX to become the first sports-native direct-clearing prediction market in the United States,” said ProphetX CEO and Co-Founder Dean Sisun. “We can now expand our best-in-class sports event market offerings to millions of Americans across the country while competing on a level regulatory playing field.

“ProphetX thanks CFTC Chairman Selig for his leadership and the Commission’s staff for their work throughout the application process, and we look forward to helping shape the future of prediction markets.”

The company submitted its DCM and DCO applications in November 2025. The decision also comes after ProphetX filed a comment letter in April 2026 responding to the CFTC’s Advance Notice of Proposed Rulemaking on prediction markets.

The rulemaking process has become an important issue across the industry. The CFTC has been gathering feedback on whether and how event contracts, including sports-related markets, should be regulated. The proposal has drawn attention from exchanges, industry groups and other stakeholders as regulators consider the future framework for prediction markets in the United States.

Against that backdrop, ProphetX said its platform is built around a market structure that includes a proprietary Request for Quote Parlay Mechanism. According to the company, the feature allows users to create and price combinations involving multiple events directly with counterparties.

The company said the mechanism borrows from trading methods commonly used in traditional financial markets. It believes that approach can provide greater flexibility while improving transparency and price competition for event-based contracts.

ProphetX also pointed to a longer regulatory history behind its business. The company said its work in the sector dates back to 2018, when it obtained a license in the United Kingdom to operate a peer-to-peer marketplace for sports event trading. It added that it was developing exchange infrastructure for sports contracts before prediction markets gained wider traction in the U.S. sports-event space.

Founded in 2018, ProphetX describes itself as America’s first sports-native prediction market. The company said its technology was designed specifically for sports-based contracts while also providing a foundation for expansion into a broader range of event-driven markets in the future.

Featured image: ProphetX via X