Sporttrade Seeks CFTC Approval to Expand Sports Betting Exchange Nationwide

Philadelphia-based Sporttrade is seeking federal approval from the US Commodity Futures Trading Commission (CFTC) to expand its sports betting exchange nationwide.

In a clear statement of intent, Sporttrade – which already holds stage gaming licenses in five states – argues that the existing regulatory divide places it at a competitive disadvantage in the complex marketplace.

Founded in 2018, Sporttrade already operates openly in Arizona, Colorado, Iowa, New Jersey, and Virginia. Unlike conventional sportsbooks, Sporttrade is an exchange-style platform that allows users to buy and sell contracts against each other based on sporting event outcomes, mimicking how stocks and bonds are traded.

However, while DraftKings and FanDuel offer cash-out options in-play, Sporttrade lets users exit positions at an accurate market value throughout the event to minimize losses or lock in profits.

CEO Alex Kane backs his firm’s trading format, saying this model “looks much more like futures trading than online casino regulation.”

Why Sporttrade Believes State Licenses Alone Aren’t Enough

Sporttrade officially submitted a formal request to the CFTC on April 25 for no-action relief to legally offer its product platform across the US. In doing so, it aims to become the first sports-only derivatives platform regulated at the state and federal levels.

In his letter to Acting CFTC Director Caroline Pham, Kane warned of “irreparable harm” if the firm is prevented from competing on an equal footing. He also cited broader competitors like Kalshi, which already operates at the federal level and utilizes its CFTC ordinance to prevent the need to acquire state gaming licenses.

Having recently won two cease-and-desist reprieves in New Jersey and Nevada, Kalshi, which offers contracts for a broader range of contests, maintains that it does not require state licensing.

“The CFTC is our regulator. If the CFTC tells us to stop, we will absolutely stop. If they don’t, then we won’t,” said Kalshi founder Tarek Mansour.

At odds with several other state regulators, Kalshi has received a flurry of cease-and-desist orders from other states, including Ohio, Illinois, and, most recently, Maryland.

The CFTC has also received several letters supporting and opposing sports event contracts from various bodies, including tribes and professional sports leagues. 

Could CFTC Approval for Sporttrade Redefine Sports Betting Regulation?

Nonetheless, despite these challenges, the latest rulings have ultimately strengthened – if only temporarily – the firm’s legal standing against state gambling regulators, which will undoubtedly invigorate Sporttrade’s appeal.

Sporttrade’s argument is further strengthened by its early compliance with state regulations. “We did not see any other way of bringing our product to market, and this was confirmed by every state gaming regulator that we spoke with,” Kane wrote.

Investors—including Jump Capital, Hudson River Trading, and Tower Research Ventures—now await the CFTC’s response to determine whether Sporttrade will be at the forefront of a new potential regulatory framework.

If this were to happen, Kane maintains that the dual-regulated methodology would strengthen competition in a market dominated by just a handful of operators. He also believes their CFTC-led approach would break up the monopoly structure inherent in the current state-by-state system.

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 Philadelphia-based Sporttrade is seeking federal approval from the US Commodity Futures Trading Commission (CFTC) to expand its sports betting exchange nationwide. In a clear statement of intent, Sporttrade – which already holds stage gaming licenses in five states – argues that the existing regulatory divide places it at a competitive disadvantage in the complex marketplace.
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