Prediction Market Startup Plans Federal Registration to Bypass State-by-State Sports Betting Rules
A cryptocurrency-focused prediction market platform is preparing to reclassify its operations under federal commodities regulations rather than state gambling frameworks, marking a potential shift in how betting markets could be structured in the United States. Novig’s chief executive Jacob Fortinsky announced plans to adopt Designated Contract Market status through the Commodity Futures Trading Commission this summer, a move that would enable nationwide operations across all fifty states simultaneously. The DCM framework, typically reserved for derivatives exchanges, treats prediction contracts as financial instruments rather than traditional wagers, potentially sidestepping the complex patchwork of state gaming licenses that currently govern sports betting. This regulatory strategy reflects growing tension between traditional sportsbooks and sophisticated bettors, as illustrated by industry veteran Adam Mastrelli from 57 Maiden, who revealed he was restricted from two major betting platforms within sixty days for placing consistently winning trades. The experience highlights how conventional sportsbooks often limit or ban skilled participants, a practice that wouldn’t typically occur in regulated financial markets. By positioning prediction markets closer to commodity futures than casino games, platforms like Novig are attempting to create a more open ecosystem where participants can trade event outcomes without arbitrary account restrictions. Whether federal regulators will embrace this interpretation and how established gaming operators might respond remains the critical question for this emerging model.
Source: CoinDesk | This article has been independently rewritten by Block Digest. Original reporting credit to the source.
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