Sporttrade Seeks CFTC Approval for Nationwide Sports Betting Expansion

A Big Move for National Reach

Right now, the company operates in just five states: Arizona, Colorado, Iowa, New Jersey, and Virginia, under state gaming licenses. But competitors like Kalshi, Crypto.com, and Robinhood, regulated federally by the CFTC, can roll out similar products nationwide, putting Sporttrade at a disadvantage.

“Given the congruence, Sporttrade should be provided the opportunity to demonstrate its ability to operate on a level playing field with venues that now offer the same product nationwide to list for trading the same menu of sports contracts,” said CEO Alex Kane.

Sporttrade argues that being stuck in five states could cause “irreparable harm” by letting rivals grab an “insurmountable market advantage.”

The company’s prepping a formal no-action relief request to the CFTC, aiming to offer event contracts without full federal registration, while proving it can meet all CFTC reporting rules and core principles.

How Sporttrade’s Exchange Works

Sporttrade runs a unique platform, acting as a stock market for sports outcomes, where users trade contracts on events like “Eagles beat Bengals in Week 1.” Each contract’s priced between $0 and $100, settling at $100 if the outcome happens or $0 if it doesn’t.

Market-driven prices reflect the odds, say, $55 for an Eagles win if they’re favored. Users can buy a contract, then sell it later if the price shifts, like if a touchdown bumps it to $75, pocketing the difference.

This setup, built on a central order book, lets users go long or short, with limit orders and real-time bid-ask data, mimicking day trading but tied to a game’s duration.

Unlike traditional sportsbooks, where bettors face the house, Sporttrade pits users against each other, offering dynamic odds based on supply and demand. The platform acts as exchange, broker, and clearinghouse, managing user funds in segregated accounts and ensuring smooth payouts.

The company openly calls its product sports betting, a stance that sets it apart from some rivals who dodge the label.

Why Go Federal?

Sporttrade’s state-by-state setup limits its reach and stops it from pooling liquidity across markets, a big hurdle when rivals operate nationwide.

Kalshi leverages CFTC oversight to offer sports event contracts in all 50 states, while Sporttrade’s stuck offering separate betting pools in each of its five states.

Exchange wagering isn’t even live in Iowa yet, though plans are in motion. By seeking CFTC approval, Sporttrade wants to unlock nationwide access, match competitors’ scale, and offer a regulated, compliant alternative that doesn’t shy away from the sports betting tag.

The company points out that the CFTC has granted no-action relief to other exchanges for event contracts in the past, setting a precedent.

Sporttrade’s request is unique, as it’s the only exchange regulated by state gaming bodies, giving it a solid track record of compliance. Kane’s betting that state regulators, with whom Sporttrade has tight ties, will back the push for a fairer market.

Sporttrade’s formal no-action relief request is in the works, with no word yet on the CFTC’s response. The agency scrapped a planned April 30 roundtable on sports event contracts, leaving the issue’s legal status murky.