ProphetX is poised for another transformation. The company, previously known as Prophet Exchange and operating as a state-licensed sports betting entity, has announced its entry into the prediction market sector. This decision follows the recent approval from the Commodity Futures Trading Commission (CFTC) regarding ProphetX's applications for a designated contract market (DCM) and derivatives clearing organization (DCO).
With this transition, ProphetX aims to broaden its reach, especially as several states have imposed bans on sweepstakes gaming applications. In sweepstakes, players purchase tokens that can be exchanged for real money. The CFTC, which regulates exchanges like prediction markets, is currently permitting these operators to include sports markets on their platforms.
Dean Sisun, CEO and Co-Founder of ProphetX, expressed enthusiasm about the company’s new direction. He stated, “This approval positions ProphetX to become the first sports-native direct-clearing prediction market in the United States. We can now expand our premier sports event market offerings to millions of Americans while competing on an equitable regulatory landscape.”
However, the outlook for prediction markets in the U.S. is uncertain. The CFTC recently proposed rules to facilitate trading in sports markets, which will be published in the Federal Register, initiating a 45-day public comment period.
Despite the CFTC's advancements, several states are pursuing legal action against current operators for allegedly functioning as unlicensed sportsbooks. Concerns have also been raised by members of Congress regarding the legality of federally regulated markets that offer sports contracts.
Mick Mulvaney, former congressman and current executive director of Gambling is Not Investing, commented, “The CFTC was created to oversee commodity markets, not to regulate sports betting. Congress never intended for federal derivatives law to serve as a loophole for unsafe sports gambling.”
The legality of prediction markets offering sports contracts may ultimately be decided by the U.S. Supreme Court, either through state cases or potential legal challenges to the CFTC's proposed regulations.
Although the exact launch date for ProphetX's new platform remains unclear, the company informed customers via email that it would temporarily go offline on Monday to facilitate the transition from a sweepstakes model to a sports prediction market. Customers will not need to take any action, and their existing cash balances will be transferred to the new platform.
ProphetX is not alone in this shift; other former sportsbooks like Novig and Sporttrade are also pursuing applications to become federally regulated prediction markets. The CFTC received ProphetX’s application on October 31, 2025.
As ProphetX enters the prediction market arena, it does so at a time when the CFTC has begun allowing operators to offer sports contracts. Kalshi currently leads the U.S. market, holding an estimated 90% share, although competitors like Polymarket, DraftKings, Fanatics, and FanDuel are expected to challenge this dominance.