Smarkets has filed an application with the U.S. Commodity Futures Trading Commission to enter the American prediction markets sector. The London-based company runs a platform built on an exchange-style model rather than a traditional bookmaker setup, and it is backed by quantitative trading firm Susquehanna.
The filing opens a regulatory process that could let Smarkets offer its prediction market exchange to U.S. participants. The company said its American expansion plan follows two regulatory tracks: CFTC approval for its core prediction exchange, and state-by-state sportsbook licenses for its SBK product.
Two regulatory tracks shape the U.S. plan
The structure highlights how event-based trading products are being assessed under different rules depending on how they are designed. Some products can fall under derivatives oversight, while others may sit inside state sports betting frameworks. Smarkets said it plans to work within existing rules as it enters the U.S. market.
Founder and CEO Jason Trost said, “The U.S. market is currently in a race against time to figure out how to regulate the predictions market.” He also said the company’s technology and operating model were built over many years under U.K. regulatory supervision, with a focus on transparency and without cutting corners.
Exchange pricing differs from sportsbook odds
Prediction markets let participants trade contracts linked to real-world outcomes, including elections, economic indicators, and sports results. That differs from a standard sportsbook model, where odds are usually set internally and include a bookmaker margin. On an exchange, participants post bids and offers, and prices are formed through trading activity.
In that setup, traders buy and sell contracts tied to possible outcomes, and market prices reflect collective expectations about the probability of those outcomes. Smarkets said its platform follows this exchange model, with prices determined in open trading rather than fixed bookmaker odds.
The company reports about $3 billion in annual trading volume and roughly $50 billion in lifetime transactions since launch. Founded in 2008, Smarkets is one of the larger regulated prediction market platforms in the U.K.
Built on proprietary infrastructure
Smarkets said it owns the full technology stack behind its platform. That includes the matching engine used to process trades, systems that handle market-making functions, and infrastructure for payments and data settlement. For exchange-style prediction markets, real-time order matching is central. The trading mechanics resemble those used in financial markets.
As prices move with trading activity, they can also act as probability signals. Supporters of prediction markets argue that these systems aggregate information from many participants, while regulators continue to assess how they fit with derivatives rules and consumer protection requirements.
Susquehanna backing and rising competition
Smarkets has received backing from Susquehanna, one of the world’s largest quantitative trading firms. Susquehanna led a $30 million Series B round for the company, and other investors include Passion Capital and DTCP. The involvement of quantitative trading firms points to growing professional interest in prediction market platforms.
The sector has drawn more attention as platforms test new ways to trade event outcomes. Some operate as derivatives exchanges, while others work through state-regulated sports betting structures. Smarkets’ decision to pursue both federal derivatives approval and state sportsbook licenses shows how the regulatory model for event-based trading is becoming more hybrid in the U.S. The CFTC process will determine whether the company can launch its exchange-style prediction market for American users.