Smarkets is taking a big step toward the United States prediction market scene. The UK betting exchange has applied to the U.S. Commodity Futures Trading Commission (CFTC) for two key licenses, a Designated Contract Market (DCM) and a Derivatives Clearing Organization (DCO) approval.
UK Prediction Market Targets U.S. Expansion
Founded in 2008, Smarkets runs one of the largest prediction exchanges in the UK today. It reports about $3 billion in yearly trading volume across its markets. The company says it has handled roughly $50 billion in lifetime trading volume so far. It operates profitably using its own in-house technology stack for matching, payments, and market data.
Smarkets is backed by trading giant Susquehanna, which adds serious market experience behind the bid. With this move, Smarkets wants to compete with CFTC-regulated prediction platforms like Kalshi and newer entrants linked to Polymarket’s U.S. effort.
With a DCM license, Smarkets could run a federally regulated exchange for event contracts all throughout the United States. These contracts are like futures markets, except they are based on real occurrences. They can be about politics, sports, economics, or culture.
The linked DCO license would let a Smarkets clearing arm handle trade settlement and collateral for listed event contracts. That clearing arm would act as a fully collateralized clearinghouse standing between buyers and sellers on each matched trade.
The company’s filing, as reported by Forbes, describes a central limit order book where users post bids and offers for binary event contracts. These contracts resolve to two possible outcomes, typically framed as “Yes” or “No” when the event settles.
Part of a Crowded CFTC Pipeline
Smarkets joins a growing list of firms seeking DCM status as federal rules for prediction markets slowly take shape. Since early 2025, the CFTC has received 17 DCM applications, with seven approved and ten still pending.
Depending on complexity and policy discussions, the CFTC’s decision on a DCM application can now take up to six months. The speed at which Smarkets and competitors can start could be determined by new CFTC guidelines on event markets, particularly sports and elections, according to market observers.
Smarkets promotes an exchange-style model where users trade with each other instead of the house setting fixed odds. If the CFTC approves its DCM and DCO applications, U.S. users could see tighter pricing and deeper liquidity for event contracts.
For now, the filing signals that prediction markets are shifting from gray areas toward full financial regulation in Washington. That shift could pull more traditional traders, quants, and even crypto natives into regulated event markets over the next few years.
READ MORE: World Liberty Financial Coin Tests Key Demand Zone as Staking Vote Passes
