While Fliff, the leader in the sweepstakes sportsbook industry made headlines recently by applying to become prediction markets platform, it wasn’t the first sweeps sports product to make that pivot.
That distinction belongs to ProphetX, which received approval from the Commodity Futures Trading Commission to become a Designated Contract Markets platform in June after applying in late 2025 and has since sunsetted its sweeps product.
In an interview with Sweepsy, ProphetX co-founder Jake Benzaquen said the increasing legal and regulatory pressure in the sweeps environment led them to view CTFC regulation “as a replacement” moving forward.
“We were around when California, New Jersey, Connecticut, New York all passed bills that outlawed sweepstakes,” Benzaquen told Sweepsy. “I think there’s been a few more that have passed since then. Now that there is a much better home for companies of our nature, sweeps will probably remain mostly social casino-focused rather than having a big sports presence, but you obviously still have a couple of sports operators in that space.”
Fliff joining prediction markets space ‘makes sense from my point of view’
Benzaquen said ProphetX has found its home.
“Sweepstakes was a good buffer period for us, but we’re extremely happy under federal oversight and consumer protection’s never been better,” he said. “The regulatory environment’s never been better. And the CFTC is really the only regulator that can properly regulate prediction markets due to their financial background and infrastructure that they have with their slew of current futures and contracts that they offer outside of the predictions landscape.”
DeFiRate reported last week that Fliff submitted an application to become a Futures Commission Merchant with the National Futures Association. There is no word yet as to whether Fliff will maintain its sweeps platform if approved by the NFA, or if it will fully pivot to prediction markets, like ProphetX did.
“There’s lots of companies getting into the space,” Benzaquen said. “They’re obviously looking to work with partners, and an FCM application definitely allows them to do so — to work with DCMs like us. It makes sense from my point of view.”
Responsible gaming was key for CFTC approval
Benzaquen said ProphetX’s focus right now is on growing their market’s infrastructure in the predictions and CFTC federal landscape “both through our own consumer product, and we have a B2B product that we can embed our markets into other consumer applications.”
ProphetX’s strategy was proving to the CFTC that they’ve operated a prediction market for a long time under many different regulatory regimes.
“We’ve had a long commitment to KYC, AML, responsible gaming — everything associated with running a real money company,” Benzaquen said. “That really was something that resonated with the CFTC, knowing that we had previously been regulated by the UKGC.
“It was really just harping on our commitment to responsible gaming, regulatory oversight, compliance. It’s a core piece of who we are.
“Predictions and federal oversight from the CFTC give consumers a much higher degree of protection. I think it’s a great step for any company that values protecting their consumers.”
‘We’re competing with everyone’
So what is Benzaquen’s outlook for ProphetX in what is beginning to become a crowded prediction markets space?
“We’re competing with everyone,” he said. “What we’re not going to do is mass acquire retail customers at scale. Kalshi and Polymarket are billions of dollars ahead on that. What we’re really good at is building liquid sports markets so we’re definitely optimistic about our B2B product and being able to turn that into a major growth opportunity.”
Benzaquen thinks the market will get even more competitive over time.
“But we believe that our liquidity infrastructure and our depth and width of sports markets have gotten us in a pretty good place for the time being,” he said. “But this market is only going to get more competitive and have more eyes on it each and every day.”
