A fantasy sports app that once sued the US derivatives regulator will partner with Kalshi Inc. to offer wagers on its platform, the latest entrant into the surging prediction markets industry.
Sleeper Markets, which says it has more than 10 million users, will work with Kalshi to provide sports contracts in time for the Super Bowl, with more real-world event markets "coming soon," the firms said Friday.
Sleeper had wanted to enter the sports prediction markets business before the start of football season but alleged it was thwarted by the US Commodity Futures Trading Commission. Sleeper said in a lawsuit last year the CFTC and former acting Chairman Caroline Pham told the National Futures Association not to approve the firm's application to become a futures commission merchant, which could allow it to enter the space.
Pham departed the CFTC in December after President Donald Trump's permanent pick to head the agency, Michael Selig, took the helm.
The National Futures Association approved Sleeper's application in early January and the company dropped its case against the CFTC days later.
The CFTC didn't immediately respond to a request for comment.
Securing a futures commission merchant registration can allow a company to work with other companies to enter the predictions markets business, where customers can wager on future events like the 2028 Republican presidential nominee or Bad Bunny's Super Bowl halftime show.
Exchange operator Cboe Global Markets Inc. plans to roll out options contracts that will enable binary bets on event outcomes, in a bid to enter the fast-growing prediction markets.
In a departure from the approach taken by rivals, Cboe's contracts will be regulated by the Securities and Exchange Commission, requiring a more onerous listing process that could help insulate the bourse from the avalanche of litigationBloomberg Terminal facing the event contract market.
Cboe wants to list the event contracts on the S&P 500 by the end of June this year, the Chicago-based company's chief executive officer Craig Donohue told analysts on an earnings call Friday.
"It will be the all-or-none style combined with what we feel is a way to intertwine some of the spread trading that we see going on today in SPX," Donohue said, referring the exchange's flagship S&P 500 Index Options complex.
Cboe is a relative latecomer to prediction markets, with crosstown competitor CME Group's joint venture with Flutter Entertainment Plc already up and running, and Polymarket and Kalshi leading the pack in terms of volumes.
Prediction exchanges like Kalshi have upended the gambling industry by listing financial contracts related to sports, politics and pop culture. They are regulated by the US futures regulator, the Commodity Futures Trading Commission, which allows new contracts to be 'self-certified' with minimal regulatory oversight. This has sparked allegations of misconduct, including complaints about insider trading, and legal challenges from multiple US states over alleged breaches of gaming rules.
Cboe said it plans to take a stricter approach that will bring the safeguards created around listed securities to predictions markets.
"Our first initial offerings will be securities products," Rob Hocking, global head of derivatives at Cboe, said during the company's fourth-quarter earnings call. "We think that's the best way to reach the broadest set of end users and it clearly differentiates what we're doing from a lot of the non-security based platforms already in the market."
The move is not Cboe's first foray into binary options. The exchange has experimented with them in the past, listing contracts on the S&P 500 and the Cboe Volatility Index in 2008. But at the time there was little appetite among traders for the derivatives and the products were quietly delisted in 2017.
Donohue said in November that the exchange operator would avoid sports contracts, and stick to offering yes or no bets on financial, corporate and economic data points.
Cboe's adjusted Ebitda rose 40% in the fourth quarter of 2026 to $464 million, while net revenue was up 28% to $671 million.