UK Betting Giant Smarkets Seeks to Upend U.S. Market with CFTC Bid

LONDON, UK – March 09, 2026 – Smarkets, a leading UK-based prediction market, has officially initiated its push into the American market by filing for a license with the U.S. Commodity Futures Trading Commission (CFTC). The move signals the company's intent to introduce its financial exchange-style betting platform to U.S. consumers, backed by trading giant Susquehanna International Group and nearly two decades of technological development.

Founded in 2008, Smarkets has grown into the UK's second-largest prediction market, processing approximately $3 billion in annual traded volume and a staggering $50 billion over its lifetime. The profitable company is now betting that its unique model—where prices are set by users, not the house—can disrupt the burgeoning U.S. betting landscape. The filing initiates a dual regulatory strategy: a federal path with the CFTC for its core exchange and a state-by-state licensing approach for its more traditional sportsbook interface, SBK.

“The U.S. market is currently in a race against time to figure out how to regulate the predictions market,” said Jason Trost, founder and CEO of Smarkets, in a press release. “We believe now is the time to enter the U.S. market and bring the learnings that have made us successful in the U.K., working with regulators, not around them.”

A New Player in a Burgeoning Market

Smarkets is not stepping into a vacuum. The U.S. prediction market landscape has rapidly matured, becoming both increasingly competitive and legitimized. The field is populated by pioneers like Kalshi, the first CFTC-regulated prediction market, and the crypto-based powerhouse Polymarket, which recently re-entered the U.S. by acquiring a licensed exchange. They are joined by the politically-focused PredictIt, which recently secured full CFTC approval after a prolonged legal battle.

The competition also includes some of the biggest names in American gaming and finance. Sports betting operators like DraftKings, FanDuel, and Fanatics have all launched their own prediction platforms, while financial firms such as Robinhood and Crypto.com are integrating event contracts into their offerings.

Within this crowded arena, Smarkets plans to carve out a significant niche by focusing heavily on sports. CEO Jason Trost anticipates that sports-related contracts will eventually dominate prediction market revenue, potentially accounting for over 90% of all volume. This forecast is supported by data from existing U.S. platforms like Kalshi, where nearly 90% of its regulated volume already comes from sports. With a platform honed in the sports-heavy UK market, Smarkets aims to leverage its experience to capture this lucrative segment.

The Exchange Model vs. The House

The core of Smarkets' disruptive potential lies in its business model, which functions like a financial exchange rather than a traditional sportsbook. Unlike bookmakers who set odds with a built-in profit margin (known as the 'vigorish' or 'vig'), Smarkets facilitates a peer-to-peer marketplace. On its platform, users bet directly against one another, with supply and demand determining the odds in real-time.

This structure introduces two types of bets: a 'back' bet, which is a conventional wager that an outcome will happen, and a 'lay' bet, where a user effectively acts as the bookmaker by betting against an outcome. This flexibility empowers traders to take positions on both sides of an event, creating a more dynamic and sophisticated trading environment. Smarkets generates revenue not from built-in margins, but by charging a small commission, typically 2%, on a user's net winnings for a given market.

This model is powered by a proprietary technology stack that the company has built and owns end-to-end, including its matching engine, payment systems, and data settlement infrastructure. This technological independence allows for rapid, transparent transactions and pricing that often proves more favorable to users than traditional sportsbooks. Recognizing that not all bettors are seasoned traders, the company also developed SBK, a sportsbook-style mobile app that provides a user-friendly interface powered by the superior pricing of its underlying exchange.

Navigating a Complex Regulatory Maze

Smarkets’ ambition faces a formidable challenge: a complex and shifting American regulatory landscape. The company has filed for both a Designated Contract Market (DCM) and a Designated Clearing Organization (DCO) license, the same path successfully navigated by Kalshi and, more recently, PredictIt's operator, Aristotle.

The timing appears favorable, as the CFTC under Chairman Michael Selig has signaled a shift away from prohibitive policies toward fostering 'lawful innovation.' The agency recently withdrew a controversial 2024 proposal that would have banned many event contracts and is now seeking public input to establish clearer rules for the industry. This follows a series of legal rebukes for the agency, including federal court rulings that overturned its attempt to shut down PredictIt and its rejection of Kalshi's election-related contracts.

However, significant hurdles remain. A fierce jurisdictional turf war is brewing between the CFTC and state-level gaming commissions. States and tribal gaming authorities argue that many event contracts, especially those on sports, constitute gambling and fall under their exclusive purview. This conflict has led to lawsuits and cease-and-desist letters against existing platforms as states move to protect their licensed sports betting revenue streams.

Furthermore, Congress is weighing in with the bipartisan 'Event Contract Enforcement Act,' which seeks to grant the CFTC authority to prohibit contracts on sensitive topics like war, assassination, and athletic competitions. While the bill also offers a path for states to opt-in to allowing such markets, it highlights the persistent ethical and political scrutiny facing the industry.

The Susquehanna Seal of Approval

Bolstering Smarkets' bid is the formidable backing of Susquehanna International Group (SIG), one of the world's largest quantitative trading firms. Susquehanna Growth Equity, its investment arm, led a $30 million Series B funding round for Smarkets, an investment that serves as a powerful endorsement of the company’s model and U.S. potential.

The synergy is clear. Susquehanna's global empire is built on sophisticated market-making and algorithmic trading strategies in traditional financial markets. A betting exchange like Smarkets operates on identical principles of price discovery, liquidity, and risk management. SIG's investment is a vote of confidence from one of the most sophisticated players in the world that Smarkets' technology is robust and its financial-market approach to betting is a winning formula.

This strategic partnership provides Smarkets not only with capital but with immense credibility. It signals to regulators and competitors that its platform is built on sound financial principles, differentiating it from other startups in the space. As Smarkets prepares for a U.S. launch, it must navigate the dual regulatory tracks for its exchange and its SBK sportsbook, a state-by-state process that previously caused the company to pause its American ambitions. With its CFTC application now filed and a powerful backer in its corner, Smarkets is making a renewed and determined play for a piece of the American market, targeting a live launch by the end of 2026.