ProphetX Wins CFTC Approval to Operate as America’s First Sports-Native Direct-Clearing Prediction Exchange
ProphetX has received approval from the CFTC to register as both a Designated Contract Market and a Derivatives Clearing Organization, positioning it as the first sports-focused exchange to operate under full federal oversight.
New York-based ProphetX announced on June 11 that the U.S. Commodity Futures Trading Commission has approved its applications to register as both a Designated Contract Market and a Derivatives Clearing Organization, making it the first prediction market platform in the country to obtain dual DCM and DCO status with a specific focus on sports-based event contracts. The milestone puts ProphetX in position to launch what it describes as a “direct-clearing” prediction exchange — meaning it will handle trade execution and settlement entirely under one federally regulated roof.
ProphetX CEO and Co-Founder Dean Sisun said the approval sets the stage for the company to become the first sports-native prediction market operating in full compliance with the CFTC’s regulatory framework. “With these CFTC licenses, ProphetX is poised to become the first sports-native, direct-clearing prediction market to launch and operate in full compliance with the CFTC’s DCM and DCO regulatory framework,” the company said in a press release.
What DCM and DCO Registration Means
Obtaining both a Designated Contract Market license and a Derivatives Clearing Organization license from the CFTC is significant because it allows ProphetX to run a vertically integrated marketplace. Most prediction market operators — including Kalshi, Polymarket, and Robinhood’s prediction markets division — operate under either a DCM or a DCO, often relying on third-party clearing arrangements.
By holding both licenses, ProphetX can allow users to trade, clear, and settle event-based contracts directly on its platform without routing settlement through a separate entity. The company says this model provides greater transparency and tighter integration of the entire trade lifecycle under a single set of CFTC regulatory requirements.
ProphetX filed its CFTC applications in November 2025 and submitted comments on the Commission’s Advance Notice of Proposed Rulemaking on prediction markets in April 2026. The CFTC’s approval came as the agency also released a broader proposed rule covering event contracts — a sign that the federal regulatory framework for prediction markets is rapidly taking shape.
A New Competitor in a Crowded Space
ProphetX enters the federally regulated prediction market space alongside Kalshi, which has been fighting a wave of state-level enforcement actions, and Polymarket, which has positioned itself as a crypto-based global prediction market. ProphetX says it differentiates itself through a proprietary parlay pricing system that allows users to build and price multi-event combinations directly with counterparties — a feature designed to appeal to bettors familiar with traditional sportsbook parlays.
The company was previously operating as a sweepstakes-based platform while it pursued federal licensing. With dual CFTC approval now in hand, ProphetX has not announced a specific launch date for its fully regulated exchange, but said it is now ready to operate “in full compliance” with federal requirements. The platform will compete not only with dedicated prediction market apps but also with the growing sports prediction market offerings from FanDuel and DraftKings, both of which have launched their own event contract products under existing federal authorizations.
For consumers exploring the prediction markets space, ProphetX’s entry represents another federally licensed option that operates independently of state sports betting licensing requirements — though the broader legal fight between the CFTC and state regulators over jurisdiction continues in eight simultaneous federal court cases. The Kalshi promo code and Polymarket promo code pages offer details on existing platforms while ProphetX prepares for its full launch.