Sporttrade has received Commodity Futures Trading Commission registrations to operate both an exchange and clearing house, giving the former state-licensed sportsbook operator the federal infrastructure it needs for a planned sports-focused prediction-market relaunch.
Sporttrade DCO LLC was registered as a derivatives clearing organization on Oct. 16, with authority to clear fully collateralized futures, options on futures and swaps. Sporttrade DCM LLC then received designated contract market status on Oct. 30; CFTC registration records were updated to show the designation on Nov. 2.
The combined registrations complete a process Sporttrade began with applications filed on Feb. 4, according to the company’s February announcement. The approvals permit the exchange and clearing functions, though individual contracts must still comply with CFTC rules and remain subject to legal disputes over sports-event contracts.
The DCM order provides for an anonymous electronic central limit order book, fully collateralized clearing and trade surveillance both in real time and on the following business day. Sporttrade’s rulebook contemplates participation by futures commission merchants, introducing brokers, direct-access participants and market makers. Its DCO can also clear for other designated contract markets.
Sporttrade plans to serve retail traders alongside brokers and market makers, with an emphasis on execution quality for brokers and their customers. It is onboarding nationally distributed brokers including Fliff, which intends to route customer orders to the exchange subject to regulatory approval. The rollout is to begin in phases with selected order-flow and liquidity providers.
The registrations follow Sporttrade’s withdrawal from state-licensed sports betting. Founded by Alex Kane in 2017, the company launched a peer-to-peer betting exchange in New Jersey in 2022 and subsequently operated in Colorado, Iowa, Arizona and Virginia.
In May, Sporttrade said it would close those operations while seeking federal registrations. It stopped accepting trades on May 25 and ended platform access on June 26. In an April 2025 CFTC submission, Kane estimated that the company had spent more than $50 million building its business across the five states, arguing that separate approvals, access fees and varying rules made national distribution impractical.
The company had designed its exchange to accommodate third-party brokers and institutional activity, a function Kane said was lost under the state-based model. He said much of the technology required for the federal relaunch was already built.
Sporttrade enters a growing group of sports-focused federally approved operators. ProphetX obtained DCM and DCO registrations in June, while Novig received DCM designation days later; Underdog and DraftKings operate CFTC-regulated exchanges acquired from existing license holders.
The legal setting remains unsettled. Federal courts have reached conflicting conclusions on whether sports-event contracts are governed by federal derivatives regulation or state gambling laws. On Oct. 9, the CFTC proposed a rule that would explicitly include sports and other event contracts within the definition of a swap.
Sporttrade expects to offer its first event-contract markets to customers in early 2027.
