ProphetX has received approval from the U.S. Commodity Futures Trading Commission (CFTC) to operate as both a Designated Contract Market (DCM) and a Derivatives Clearing Organization (DCO), paving the way for the launch of what it described as the first federally regulated sports-native prediction market exchange in the United States.
The approvals allow ProphetX to operate a vertically integrated platform where users can trade, clear, and settle event-based contracts under the CFTC’s regulatory framework.
The approvals followed applications submitted in November 2025 and a comment letter filed in April 2026 in response to the regulator’s Advance Notice of Proposed Rulemaking on prediction markets.
“This approval positions ProphetX to become the first sports-native direct-clearing prediction market in the United States. 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,” Chief Executive and Co-Founder Dean Sisun said.
“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.”
Prediction markets have emerged as one of the fastest-growing segments of the event-contract industry, allowing users to trade contracts tied to the outcomes of real-world events, including elections, economic data releases and sporting contests.
The dual registration will enable the company to directly manage trading, clearing and settlement activities under federal oversight.
The company also highlighted its proprietary Request for Quote (RFQ) Parlay Mechanism, which allows users to create and price combinations of multiple event contracts directly with counterparties. According to ProphetX, the mechanism is designed to mirror trading protocols commonly used in traditional financial markets while providing greater transparency and pricing flexibility.
ProphetX’s regulatory journey began in the United Kingdom in 2018, where it was licensed as a peer-to-peer marketplace for sports event trading. The company had been developing exchange infrastructure for sports-based contracts before prediction markets gained traction in the U.S. sports event contract sector.
The approval comes as prediction market operators seek to expand their presence in the United States amid growing interest in event-based contracts and ongoing regulatory scrutiny of the sector.