ProphetX At A Crossroad Regarding Keeping Sweepstakes Product Or Not

Speaking with Sweepsy, Jake Benzaquen, co-founder of ProphetX, said that the site plans to keep the sweepstakes platform available for now while it attempts to enter the regulated sports prediction market. 

“It’ll be a decision when we ultimately achieve CFTC approval whether to shutter sweeps or not,” Benzaquen told Sweepsy, “but that’s not a decision that we’ve made at this point.”

ProphetX has filed to become a Designated Contract Market and Derivatives Clearing Organization with the Commodity Futures Trading Commission.

This comes at a time when ProphetX could operate under one umbrella with the CFTC. In contrast, the sweepstakes casino and sportsbook market has been under consistent pressure across multiple states this season. 

Prediction Market Launch Unknown

As ProphetX waits for approval, the timeline for when the prediction market could launch is entirely unknown. 

“That’s with the CFTC and their staff,” Benzaquen said. “But we obviously look forward to working with them on as smooth an approval process as possible on the timeline for choosing to file the application and pursue this path.”

Should ProphetX enter this space, they'll join Kalshi and Polymarket, and not only that, but FanDuel and DraftKings have considered getting in on the action. 

“Given some the rulings last year surrounding Kalshi and offering event contracts on elections, and then ultimately moving into sports, I would say we’ve been looking at this in detail a lot more over the last six months but have been aware of it over the last one to two years,” Benzaquen said.

ProphetX is currently operational and offers something similar to an event contracts platform. Thus, Benzaquen hopes that ProphetX's approval process will be completed faster. 

“We’ve been operating a prediction market platform well before it was called the prediction market platform for a long time and have been seeking the right regulatory framework to operate in the long term,” Benzaquen said. “We initially tried in the UK and then we tried getting state licenses in the OSB (online sports betting) landscape, ultimately landing on sweeps over the past year.”

Sweeps Problems Happened Faster Than Expected

Benzaquen also commented on the sweepstakes industry, saying that the movement to ban them happened in a way they didn't necessarily expect.

“There’s obviously been a lot of movement in the industry to get rid of sweeps and to ban sweeps,” Benzaquen said. “I think most of that is as a result of social casino rather than social sportsbooks. It’s moved a lot quicker than we anticipated but was always something that we knew was coming down the pipeline.”