Smarkets Pursues CFTC License for U.S. Prediction Markets

Betting Big on America

Trost sees prediction markets, like those popularized by Kalshi, as the same beast as betting exchanges, and he’s ready to ride the wave after Kalshi’s legal win cracked open the regulatory gates. “With politics, it’s 100% interesting. With sports, it’s a million percent interesting,” Trost said.

The DCM license, which greenlights running a full-fledged exchange, is no small feat. Trost pegs the process at two years and $2 million, calling it “hairy, long, detailed, and political.”

Smarkets has lawyered up and brought in consultants to tackle the CFTC’s principles-based system, where there’s no clear checklist, just a “fuzzy bar” for approval that’s part logistics, part politics.

Why not go for the quicker broker license? Trost says it’s a trap; despite a supposed six-week timeline, it’s more like six to 12 months with messy custody rules. The DCM path aligns better with Smarkets’ vision to operate as a true exchange under its own brand.

Why Now?

Smarkets eyed the U.S. back in 2017 when Trost moved stateside, but the market was a snooze. Political betting, like PredictIt’s no-action letter setup, was capped with low stakes and tiny deposits, and sports were off-limits. “Without politics or sports, you’re stuck with oil prices—nobody cares,” Trost quipped.

Kalshi’s 2025 court victory over the CFTC changed everything, legalizing political markets and potentially sports. Trost sees it as a “no-brainer,” especially with politics now a sure bet and sports a 50-50 shot. Even if sports get nixed, Trost says political markets, active every two to four years, make the move worthwhile.

The goal’s bigger than just elections. Trost wants Smarkets to evolve into a one-stop platform where users can trade stocks, bonds, options, and prediction markets.

“I want to be Smarkets in the U.S. as an exchange,” he told the podcast, envisioning a hub for all kinds of asset trading.