ProphetX Weighs Shutting Down Sweepstakes While Preparing for Prediction Market Launch

Prophet X, a New York-based sports-prediction market platform, has filed its applications with the Commodity Futures Trading Commission (CFTC) to operate as sa Designated Contract Market (DCM) and a Derivatives Clearing Organization (DCO). 

While the application puts ProphetX a few steps away from participating in a regulated sports prediction market, it isn’t exiting the sweepstakes casino market, at least not in the next few weeks. In a recent interview, co-founder Jake Benzaquen said they’re still undecided, adding that they will decide once the CFTC approves the application.

ProphetX Makes a Push for Regulated Sports Prediction Market

In a press release filed on November 10th, ProphetX announced that it has filed applications with the CFTC to register as a Designated Contract Market (DCM) and Derivatives Clearing Operations (DCO). If successful, the company will become the first regulated clearinghouse and exchange in the US for sports-based contracts.

ProphetX’s filings aim to bridge the gap between traditional financial and sports derivatives. The company plans to launch a vertically integrated marketplace where users can trade, clear, and settle event-based contracts in compliance with CFTC regulations.

A crucial component in its filing is the Request for Quote (RFQ) Parlay Mechanism, which allows its users to create and price multi-event combos directly with counterparties. It’s the same arrangement found in traditional financial markets, offering transparency, flexibility, and competitive pricing. 

According to Dean Sisun, CEO and co-founder of ProphetX, their goal is to build an innovative, transparent, and compliant marketplace that treats sports outcomes seriously and with integrity. Sisun further shared that the filing “is the next logical step in legitimizing the future of user-driven sports trading”.

Sweepstakes Casino Operations Continue, For Now

ProphetX will continue operating its sweepstakes casino service while preparing for its pivot to a regulated sports prediction market.  When asked about this product, Benzaquen says that they remain committed. 

He added that “It’ll be a decision when we ultimately achieve CFTC approval whether to shutter sweeps or not,” adding that it’s not a decision they’ve made at this point.

ProphetX currently operates its sweepstakes product in 40+ states. If the application is approved, users can now trade sports-based contracts like financial derivatives in a secure and regulated manner. For users, it offers a promising new model, it’s a new product, using a P2P setup, under strict CFTC regulations.

REFERENCES

• ProphetX Press Release
• ProphetX