Prediction markets and sports betting: How this UK exchange is trying to do both in the U.S.

Smarkets, the UK betting exchange founded in 2008, is pursuing two parallel routes to enter the U.S., reflecting uncertainty over how prediction markets should be regulated. In March, it first filed with the Commodity Futures Trading Commission for a license, citing a legal question about whether the CFTC has federal preemption. The company also has pending sportsbook applications in Illinois, Iowa, and Michigan—states that have treated prediction markets as unlicensed sports betting—while already operating as a sportsbook in Indiana. Susquehanna-backed Smarkets says it views sports-event contracts as hedges and prefers a federal framework, not state-by-state control.