# ProphetX

**Type:** Prediction market exchange  
**Status:** Regulatory applicant  
**Founded:** 2024-2025  
**Domain:** Sports event contracts  

## Overview

ProphetX is the first U.S. exchange purpose-built for sports event contracts, taking a regulatory compliance-first approach. Filed CFTC applications in November 2025 to register as both a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO).

## Regulatory Strategy

ProphetX's approach differs from existing prediction market operators by building for regulatory engagement rather than regulatory arbitrage. In April 2026, ProphetX filed ANPRM comments proposing a Section 4(c) "conditions-based framework" for sports event contracts.

### Section 4(c) Proposal

- Proposes CFTC use Section 4(c) of the CEA to create uniform federal standards specifically for sports event contracts
- Would codify recent CFTC staff no-action relief for technology vendors into binding requirements
- Creates additional basis for federal preemption over state gaming laws that is narrower and more targeted than existing "swaps" classification argument
- Recommends codifying best practices: consumer protection standards, anti-manipulation mechanisms, league partnership requirements

## Timeline

- **2024-2025** — Founded as purpose-built sports prediction market exchange
- **2025-11** — Filed CFTC applications to register as both DCM and DCO, first U.S. exchange purpose-built for sports event contracts
- **2026-04-20** — Released ANPRM comments proposing Section 4(c) conditions-based framework for sports event contracts