Sporttrade Wins CFTC Approval as a Prediction Market

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Alex Kane and Sportrade Earn Praise Following CFTC Approval

A gigantic congratulations goes to Alex Kane and Sportrade after the company received CFTC approval to operate as a designated contract market, or prediction market.

In the press release announcing the approval, Kane said, “Receiving our DCM and DCO registrations from the CFTC is a true full-circle moment for our company. We founded Sportrade on the principle that sports markets deserve the same high-performance structure, tight pricing, and regulatory integrity as traditional financial markets.”

He continued, “By operating as both the exchange and the clearing venue, we are empowered to offer broker partners superior market quality while giving sophisticated traders the liquidity, transparency, and service they demand. In addition to our exchange business, we’re pleased to have begun clearing discussions with several exchanges who have understood Sportrade to be a market leader in exchange and clearing technology over the past five years.”

Kane and Sportrade deserve a standing ovation. They have represented themselves properly and done things the right way. Kane is a friend of the program, a former sponsor of Bostonian versus the Book, and a former weekly guest on the show. Everyone in this space should be happy for him and the company.

I am not anti-prediction market, nor am I against people trying to operate the right way. I am against lying, a lack of integrity, and companies claiming that what they are doing is not sports gambling. Kane has been open about Sportrade’s position and its desire to operate within the current landscape.

Sportrade has been licensed in states including New Jersey and Pennsylvania. It has been vetted, paid licensing fees and taxes, and followed the rules. The company is now operating on the playing surface established by the government. If those are the rules and Sportrade is following them, I support what it is doing. I would support any sportsbook taking the same approach if it followed the rules.

I believe the landscape will change, but that will take time. New politicians will not be sworn in until January, after which committees must be formed and laws must be passed. The current environment will not change immediately.

I also believe the CFTC will eventually investigate markets that may be corrupt. The agency once had a large Chicago office filled with regulators, but that presence has been gutted. As a result, there has been no one there to investigate securities issues, fraud, or potential corruption in prediction markets.

Once that scrutiny returns, companies such as Sportrade may stand out as examples of businesses that did things the right way. I am a huge fan of Alex Kane and what Sportrade has accomplished. This is not a paid endorsement; the company sponsored the show years ago. It is simply sincere praise and congratulations for Kane and Sportrade.