Sleeper Markets counsel accuses CFTC of prohibiting prediction markets application

Milbank Partner Joshua Sterling released a letter sent to the OIG on his social media accounts, describing the Commission’s denial of Sleeper Markets’ application as an ‘illegal delay.’

Milbank Partner Joshua Sterling, on behalf of Sleeper Markets LLC, the prediction market business of fantasy sports platform Sleeper, issued a letter to the Office of the Inspector General (OIG) to accuse the Commodity Futures Trading Commission (CFTC) of violating federal law by denying its application filed with the National Futures Association (NFA). 

Sleeper Markets filed an application with the NFA in August to register as a futures commission merchant under the Commodity Exchange Act, but now believes the CFTC instructed the Association to withhold the application prior to approval. 

“In light of our understanding for the reason for the delay of a complete and satisfactory application, and the lack of engagement by the commission, we are deeply concerned that the CFTC is arbitrarily and capriciously exercising its power to obstruct a timely issuance of Sleeper’s license in a manner that flagrantly violates the CEA,” Sterling said. 

“If this is as far as the misconduct goes, it is bad enough. But we are concerned that this kind of misconduct may be more widespread.”

Good to know: Underdog Fantasy formed a new partnership with Crypto.com on September 2 to begin offering sports event contracts 

Sterling also described the CFTC’s dismissal of the application as an “illegal delay,” and requested the OIG for the Commission and the US Department of Treasury to investigate Sleeper Markets’ application process. 

If Sleeper Markets’ application were to be approved, it would allow for the business to partner with a designated contract market to begin offering sports event contracts. 

Sterling released the letter on his social media accounts, and further claimed the CFTC blocked the application without providing an explanation and believes the regulator holds “no discretion to delay approval of materially complete FCM applications.”

Kirk Geller

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