Smarkets, a UK-based betting exchange, is making its way into the U.S. by pursuing two separate avenues.
The company, which was founded in 2008, filed for a license with the Commodity Futures Trading Commission in March. The platform — which has over $60 billion in lifetime trading volume — also has pending applications to operate as a sportsbook in Illinois, Iowa and Michigan, according to Smarkets founder Jason Trost.
"The reason we're doing the dual track is because the legal situation is unclear if the CFTC has federal preemption or not," Trost said. Just like prediction market platforms Kalshi and Polymarket, sports also drives Smarkets' volume, he added.
A growing number of states have argued prediction markets are operating as illegal gambling platforms. The CFTC has hit back, however, suing multiple states to block efforts looking to regulate the platforms. Last month, 44 state attorneys general also wrote that the federal agency cannot be the exclusive regulator of sports-related event contracts found on exchanges.
