In an interview with Sweepsy, ProphetX co-founder Jake Benzaquen said he plans to keep his site’s sweepstakes gaming platform live — at least for now — while the company moves forward with plans to launch a regulated sports prediction market.
“It’ll be a decision when we ultimately achieve CFTC approval whether to shutter sweeps or not,” Benzaquen told Sweepsy, “but that’s not a decision that we’ve made at this point.”
ProphetX has filed with the Commodity Futures Trading Commission (CFTC) to become a Designated Contract Market and Derivatives Clearing Organization. This is the sports betting platform’s first step toward launching a regulated sports prediction market in the United States.
This would let ProphetX operate nationwide under the CFTC umbrella instead of navigating state-by-state gaming regulations.
Sweepstakes casinos nationwide are facing regulatory challenges in 2025. States implementing restrictions this year include Montana, New Jersey, Connecticut, and California. New York passed a bill banning sweeps casinos, but it hasn’t been signed yet. Several other states have also sent out a series of cease-and-desist orders.
When will ProphetX launch its sports prediction market?
Benzaquen said the timeline for approval is not in their control.
“That’s with the CFTC and their staff,” he said. “But we obviously look forward to working with them on as smooth an approval process as possible on the timeline for choosing to file the application and pursue this path.”
ProphetX has been evaluating this move over the past year before it gained traction with other platforms. If approved, ProphetX would join Kalshi and Polymarket in avoiding state gaming taxes and allowing nationwide access. This has also caught the attention of major sportsbooks including DraftKings and FanDuel.
“Given some the rulings last year surrounding Kalshi and offering event contracts on elections, and then ultimately moving into sports, I would say we’ve been looking at this in detail a lot more over the last six months but have been aware of it over the last one to two years,” Benzaquen said.
ProphetX will need to go through a vetting, certification, and approval process with the CFTC to get those licenses. But given that they are currently operating a platform that’s similar to an event contracts platform, Benzaquen said he hopes that it’ll be expedited.
“We’ve been operating a prediction market platform well before it was called the prediction market platform for a long time and have been seeking the right regulatory framework to operate in the long term,” Benzaquen said. “We initially tried in the UK and then we tried getting state licenses in the OSB (online sports betting) landscape, ultimately landing on sweeps over the past year.”
Sweeps pressure has ‘moved a lot quicker than we anticipated’
ProphetX has conviction that the CFTC is the right regulatory body to oversee sports event contracts long term.
“There’s obviously been a lot of movement in the industry to get rid of sweeps and to ban sweeps,” Benzaquen said. “I think most of that is as a result of social casino rather than social sportsbooks. It’s moved a lot quicker than we anticipated but was always something that we knew was coming down the pipeline.”
ProphetX is looking forward to seeing how these court cases play out, but Benzaquen said they have more conviction that CFTC approval is a long-term home for them from a legal and regulatory standpoint.
“Getting licenses with the CFTC will give us confidence in the legal standing that we’ve been looking forward to for a while,” Benzaquen said.
For the interim, ProphetX is going to keep operating and keep growing their sweep customer base and their sweeps platform as much as they can.
“But obviously, the ability to launch in all 50 states subject to CFTC approval is one that we’re looking forward to,” he said.
Benzaquen: Prediction markets lead ‘to transparent pricing’
Benzaquen’s motivation has stemmed from the need for a prediction market platform or peer-to-peer type platform in the sports betting and sports gaming ecosystem.
“We’ve always believed that exchanges, prediction markets are a necessary platform to have for the consumer in a greater environment,” Benzaquen said. “It leads to transparent pricing. It leads to lower margin products, more fairness, and transparency overall.”
ProphetX had these convictions since launching its sports betting platform and having this idea that it has a necessary place. Benzaquen thinks that’s only been validated by the prediction market craze that’s taken over the past year.
DraftKings announced last month it would offer sports on its new prediction market platform after acquiring Railbird, a prediction market registered with the CFTC.
In August, FanDuel announced that it will partner with derivatives marketplace CME to create an event contacts platform in the U.S.
