ProphetX will soon facilitate World Cup betting in all 50 states as a federally regulated prediction market after it received Commodity Futures Trading Commission (CFTC) approval last week.
One way ProphetX will be different from most leading exchange betting platforms is that it will not have an affiliated trading arm taking bets from the public, an organizational structure that has drawn comparisons to traditional sportsbooks and raised conflict-of-interest concerns.
Prediction market exchanges often advertise as being “peer-to-peer” without a “house”—claims that become more complicated when a corporate sibling has a financial stake in the public’s wins and losses.
“We won’t be trading against our customers,” ProphetX co-founder Jake Benzaquen said in an interview with Sportico. “We never have. We believe that the most open and fair marketplace, and the best version of an exchange or prediction market, is one where we’re not competing in that liquidity pool and competing to candidly get our customers losing money.”
Like other prediction markets, ProphetX will work with third-party institutional market makers that will provide liquidity to its platform.
