Smarkets is entering the U.S. prediction market race but also applying to run as a sportsbook within states amid regulatory uncertainty at the federal level, according to company filings and regulatory records. The move places the betting exchange directly into a complex American market characterized by jurisdictional division between federal oversight and state-level licensing.
Navigating Dual Regulatory Frameworks in the US
The strategic push by betting exchange operators into the United States highlights a fundamental regulatory puzzle: bridging two distinct legal structures that treat wagering structures under completely separate authorities. Traditional sports betting in the US operates on a state-by-state basis, requiring operators to secure individual licenses and meet compliance criteria set by each jurisdiction. Conversely, prediction markets structured as event contracts fall under the purview of federal oversight.
This division has created a challenging operational environment for companies attempting to offer both products concurrently. Similar market entrants have encountered extensive review timelines with federal regulators. For instance, RSBIX LLC—a US associate of the 15-year-old UK sports betting exchange Matchbook—filed for approval with the Commodity Futures Trading Commission in September 2025. While initial leadership projections anticipated clearance by March 2026, regulatory review timelines have since stretched toward the third quarter of 2026, illustrating the friction involved in obtaining federal clearance for event contract platforms.
The Exchange Model and Competitive Landscape
The push into American prediction markets and sports betting follows live testing in the United Kingdom. Matchbook launched a dedicated prediction market platform domestically featuring binary yes-or-no contracts spanning sports, politics, and current events priced via crowd-sourced probability. By mid-2026, that UK framework had integrated industry partners such as ADI Predictstreet for World Cup coverage.
Unlike traditional bookmakers where consumers wager against the house, peer-to-peer exchanges allow users to trade against each other while the platform collects a commission. Operators entering this space are attempting to position their infrastructure as white-label products—serving as underlying technology providers for other brands rather than competing solely as consumer-facing applications. This operational approach targets a sector that has seen heightened attention following legal battles by operators like Kalshi to list political event contracts under federal oversight.
Next Milestones and Market Entry
The pace of expansion for incoming exchange operators depends heavily on pending federal decisions and state licensing approvals. Key operational milestones include securing CFTC clearance for event-contract platforms, identifying target states for traditional sports betting deployment, and establishing whether white-label distribution agreements will secure traction among commercial partners.
