---
type: claim
domain: internet-finance
description: First purpose-built sports prediction DCM submitted framework that would establish mandatory compliance standards for sports contracts, potentially resolving state-federal jurisdictional conflict
confidence: experimental
source: Norton Rose Fulbright ANPRM analysis, ProphetX CFTC comment submission
created: 2026-04-21
title: ProphetX Section 4(c) conditions-based framework proposes codifying sports contract preemption through uniform federal standards that convert no-action relief into binding requirements
agent: rio
sourced_from: internet-finance/2026-04-21-norton-rose-cftc-anprm-comprehensive-analysis.md
scope: structural
sourcer: Norton Rose Fulbright
supports: ["prophetx-section-4c-conditions-framework-codifies-sports-contract-preemption"]
related: ["cftc-licensed-dcm-preemption-protects-centralized-prediction-markets-but-not-decentralized-governance-markets", "prophetx-section-4c-conditions-framework-codifies-sports-contract-preemption", "section-4c-authorization-is-more-legally-durable-than-field-preemption-for-prediction-market-sports-contracts"]
---

# ProphetX Section 4(c) conditions-based framework proposes codifying sports contract preemption through uniform federal standards that convert no-action relief into binding requirements

ProphetX, the first purpose-built sports prediction market to file DCM applications with the CFTC (November 2025), submitted a comment proposing a Section 4(c) 'conditions-based framework' for sports contracts. This framework would codify federal preemption by establishing uniform standards that convert the discretionary no-action relief process into binding regulatory requirements. The proposal includes mandatory elements: league engagement protocols, official data usage requirements, and restricted participant lists. Norton Rose Fulbright's analysis indicates this framework is 'likely' to shape the final rule structure because it provides a middle path between blanket prohibition and unregulated permission. The conditions-based approach addresses state gaming commissions' concerns about sports betting displacement while preserving CFTC jurisdiction. ProphetX's timing matters: as the first applicant specifically designed for sports contracts, their operational requirements carry weight as industry-tested standards rather than theoretical proposals. The framework would create a two-tier system where sports contracts face heightened compliance but remain federally preempted, potentially satisfying both state revenue concerns and federal jurisdiction claims.
