Sporttrade to quit online sports betting amid prediction markets pivot

Sporttrade has announced that it will cease its online sports betting operations at the end of this month as it looks to gain a foothold in the booming prediction markets space in the US.

In an update sent out to users, the VC-backed exchange confirmed the plug will be pulled on its exchange product in its five regulated states on 25 May 2026.  

Customers in New Jersey have been informed they will need to withdraw funds from their accounts by that date as they will lose access from that point. 

Users in Arizona, Colorado, Iowa and Virginia will have until 25 June to withdraw funds before their accounts are closed. 

The platform will shut down completely on 26 June, with any remaining balances mailed to users via cheque.

Sporttrade first requested approval from the Commodity Futures Trading Commission (CFTC) to roll out event contracts nationwide in April 2025.  

The Philadelphia-based firm also submitted an application with the derivatives regulator in February to operate as both a designated contract market (DCM) and derivatives clearing organisation (DCO). 

Others awaiting CFTC approval to operate as DCMs includesweepstakes exchange ProphetX and legacy betting exchange Smarkets.   

Sporttrade, which was licensed as a sports betting platform in 2022, has always operated its betting exchange with a similar interface to that of prediction markets, including percentages to express probability. 

In October 2024, the operator secured SIG Sports Investments as a strategic investor. According to PitchBook, Sporttrade has raised $46.2m to date. 

CEO Alex Kane has previously suggested that online sports betting and prediction markets should be able to co-exist in the same sphere. 

In other prediction market news, the American Gaming Association (AGA) and Indian Gaming Association (IGA) have written a joint letter to the US Congress calling for further intervention.  

Both trade bodies are asking for the inclusion of language in regulation which would ban sports- and casino-related event contracts nationwide.  

The letter stated that congressional intervention on the matter “has become even more evident and more urgent”.  

The letter read: “On behalf of the American Gaming Association (AGA) and the Indian Gaming Association (IGA), we write to follow up on our 12 January 2026 letter regarding the rapid expansion of sports event contracts offered through Commodity Futures Trading Commission (CFTC)-registered prediction markets.  

“Since then, the need for congressional action has become even more evident and more urgent. As Congress considers cryptocurrency market structure legislation, we strongly urge inclusion of explicit language to make it crystal clear that sports betting and casino-style gambling cannot be conducted nationwide through federally registered platforms under the guise of ‘event contracts’.

“Our industry operates under strict state and tribal oversight and a longstanding American framework that prioritises local control, transparency, integrity and responsible gaming. Where sports betting has been legalised, states and tribes impose strong guardrails to protect consumers and the public. 

“In contrast, so-called ‘sports event contracts’ offered by CFTC-registered prediction markets are indistinguishable from sports betting yet are being made available nationwide without the licensing, consumer protections, integrity safeguards, tax contributions, or local accountability required under state and tribal gaming frameworks.” 

Data published by the AGA in February showed that legal wagering in the US generated record gross gaming revenue (GGR) of $78.2bn in 2025. 

The letter continued: “It has also become abundantly clear in recent months that the CFTC has no intention of enforcing its longstanding rules that prohibit sports betting contracts, nor will it defer to the courts to decide these matters as chairman [Michael] Selig promised during his Senate confirmation hearing last November. 

“The harms presented by unchecked prediction markets are real and escalating, and momentum for congressional action is growing. Before handing the CFTC more authorities over digital assets, Congress should reaffirm longstanding congressional intent to prevent gambling through our nation’s financial markets.

“This will protect consumers, safeguard the integrity of both sports and financial markets, preserve the authority of states and tribes to regulate gaming within their jurisdictions, and better position the CFTC to effectively regulate cryptocurrency markets.” 

“We stand ready to work with you on appropriate language and appreciate your consideration.” 

Earlier this month, the US Senate passed a bipartisan bill preventing its members from using prediction market platforms.