Sweeps and Fantasy Sports Companies Continue to Pivot to Prediction Markets
Rebet, a social sportsbook and sweepstakes casino, and Realtime Fantasy Sports, a 31-year-old fantasy sports platform, both submitted applications to register as Futures Commission Merchants with the National Futures Association on June 11, the latest in a steadily growing list of non-traditional operators seeking a foothold in the federally regulated prediction market space.
The applications are unlikely to generate headlines on their own as neither company is a major player in the conventional sense. But the pattern they represent is becoming a trend worth tracking. PrizePicks became the first sports entertainment operator to receive FCM registration from the NFA in September 2025, and since then, the queue has grown steadily.
DraftKings, Fanatics Betting and Gaming, and Underdog all had NFA applications in process by late 2025. Underdog received full FCM approval in January 2026 and has since launched sports event contracts in 29 U.S. jurisdictions. ProphetX and Novig were both approved as designated contract markets within the past two weeks, less than six months after their applications first appeared on the CFTC portal.
The pace of applications has accelerated alongside, and in some cases because of, the regulatory and legal turbulence surrounding the established prediction market platforms.
The Difference: DCM vs. FCM Registration
The distinction between a Futures Commission Merchant and a Designated Contract Market matters for understanding what these companies are actually seeking. A DCM operates as an exchange, making markets that others trade on. Kalshi, Polymarket US, and CME Group are DCMs. An FCM cannot make markets but can offer its users access to contracts traded on a registered DCM, much like FanDuel Predicts, PrizePicks, and Coinbase function as distribution channels for Kalshi or Polymarket’s underlying contracts.
For a sweepstakes casino like Rebet or a legacy fantasy sports platform like Realtime, the FCM path is the lower-friction entry point. They do not need to build exchange infrastructure or obtain a DCM designation. They need to pass NFA’s membership review, partner with an existing DCM, and integrate that DCM’s contracts into their existing product. The regulatory lift is meaningful but considerably smaller than building a full exchange from scratch.
The commercial logic is just as easy as plug-and-play. Both sweepstakes casinos and daily fantasy sports platforms have spent years building user bases that are comfortable with real-money competition, familiar with probabilistic thinking, and accustomed to interfaces that resemble sports betting without technically being licensed as such.
That audience maps directly onto prediction market users. Underdog, for example, initially launched prediction market contracts through a technology partnership with Crypto.com and has since moved into 29 jurisdictions, giving up its Missouri sports betting license shortly before that market launched rather than competing on both fronts simultaneously. The signal there is clear: for some operators, prediction markets are not an add-on to a sportsbook strategy. They are simply replacing it.
Prediction Market Pivots Aren’t Just For Crypto-Native Startups Anymore
The attraction for operators isn’t limited to product fit alone. It is also regulatory arbitrage. Sweepstakes casinos have operated in a legally ambiguous space for years, arguing that virtual chips are promotional currency rather than real money wagers. Daily fantasy sports companies made an analogous argument a decade ago, when they classified their contests as games of skill exempt from UIGEA. Prediction markets offer a third version of the same move: event contracts are federally regulated financial instruments, not state-licensed gambling products, which means an operator can reach users in states where online sports betting is not legal, or where their existing license does not extend.
That window is not guaranteed to stay open as the front lines of litigation have been active. The CFTC’s proposed rulemaking on event contracts would bar certain categories of sports contracts, particularly microbets and college sports markets. The Sixth Circuit oral arguments scheduled for July 30 could significantly narrow the jurisdictional picture. The New Jersey, Kentucky, and Michigan litigation threads all represent states actively testing the limits of the preemption argument. And Flip Pidot of Sharp Square Capital, himself a prominent prediction market advocate and a recent NFA applicant, acknowledged publicly that the regulatory environment resembles a party that the authorities might eventually ask to quiet down.
What operators filing NFA applications right now appear to be calculating is that the window is still open enough to be worth entering, and that a foothold established during the current regulatory moment is easier to defend than one built from scratch after the rules tighten. Whether that calculus proves correct will depend substantially on what the Sixth Circuit and the CFTC rulemaking process produce over the next several months.
For now, the queue at the NFA keeps growing. Each new applicant is a data point in the same direction: the prediction market pivot is no longer a strategy exclusive to crypto-native startups and established financial exchanges. It has become the default hedge for any gaming-adjacent operator trying to figure out where the puck is going.
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