Fliff, one of the more prominent social sportsbooks built on a sweepstakes model, is taking a formal step toward the federally regulated prediction market industry by having a new affiliate apply to become a Futures Commission Merchant (FCM).
Fliff FCM LLC filed with the National Futures Association (NFA) on Aug. 12 for FCM registration and NFA membership, while also seeking approval as a swap firm. All three applications remain pending. An FCM can serve as the customer-facing intermediary for contracts listed on a Commodity Futures Trading Commission-regulated exchange, meaning Fliff would not need to operate its own Designated Contract Market (DCM) to offer prediction markets.
The move puts Fliff in an increasingly familiar company. ProphetX, which previously operated as a sweepstakes sportsbook, relaunched in June as a federally regulated prediction market after receiving DCM approval. Novig followed this month, relaunching nationwide through its CFTC-regulated Ludlow Exchange after previously using the sweeps model.
More appear to be following. Onyx Odds, a sweepstakes-based social sportsbook, has been preparing its own prediction market offering and had a new affiliate, Onyx Markets LLC, file for FCM registration on Aug. 12, the same date as Fliff. Rebet, which combines a social sportsbook and sweeps casino in the same app, has had an FCM application pending through Rebet Predictions LLC since June 11. MyPrize, a sweepstakes casino rather than a sportsbook, has also announced plans for a prediction market product.
The migration comes as the broad state access that helped make sweepstakes gaming attractive has increasingly come under pressure. States have enacted bans, issued cease-and-desist orders, and otherwise challenged operators that offered sportsbook- and casino-style products without conventional gaming licenses. Prediction markets offer a different regulatory route through the federal commodities framework, but sports event contracts are already generating their own battles with states over whether federal regulation preempts state gambling laws.
The sweepstakes route for iGaming operators starts to narrow
The sweeps model offered gaming startups an appealing alternative to the traditional U.S. regulatory map. Rather than pursuing sportsbook or online casino licenses state by state, operators structured their products around sweepstakes rules, typically offering a free-play currency alongside a promotional currency that could be redeemed for cash prizes. That allowed some platforms to launch across most of the country while avoiding the licensing fees, gaming taxes, and other requirements imposed on state-regulated sportsbooks and casinos.
The model has always rested on a disputed legal premise. Operators have maintained that their products comply with sweepstakes laws, while state regulators and the regulated gaming industry have increasingly argued that dual-currency platforms offering sportsbook- or casino-style games amount to unlicensed gambling.
Over the past two years, that disagreement has turned into a wave of legislation and enforcement, with states using outright bans, cease-and-desist orders and other actions to push sweeps operators out.
Fliff sweeps contraction
For Fliff, the once-broad map has already contracted considerably. Its current sweepstakes rules prohibit Fliff Cash play in 20 states, including major markets such as California, New York and Michigan. Arizona regulators specifically ordered Fliff to stop offering what they characterized as unlicensed event wagering last year, while newer state laws have continued shrinking the industry’s potential footprint. California’s dual-currency sweeps ban took effect Jan. 1, while Indiana and Maine also enacted new prohibitions this year.
Prediction markets have emerged as another possible route to broad U.S. distribution as the sweepstakes route is narrowing. Registering with the CFTC or NFA carries substantial upfront and ongoing regulatory requirements, but the federal framework offers a fundamentally different proposition: access through a single derivatives regulatory system rather than securing separate gaming licenses in every state where an operator wants to offer its products.
For sports-focused sweeps companies watching their state maps contract, that distinction is becoming increasingly significant.
Fliff had already signaled prediction market plans
Fliff’s roots are firmly in sports. Founded in 2018, the company built its business around a social sportsbook that pairs free-play Fliff Coins with redeemable Fliff Cash sweepstakes contests.
The company has steadily expanded beyond that original model. In 2024, Fliff acquired the consumer technology and engineering team behind Mojo, the former athlete trading exchange. Fliff co-founder and CEO Matt Ricci said at the time that acquiring Mojo’s platform provided “an immediate path to accelerate product development.” Fliff followed with the Sidepot sweepstakes casino in 2025, then launched its peer-to-peer Superstars DFS product, now called Fliff Pick’Em, at the start of 2026, around the same time that California’s sweeps ban took effect.
By late June, Fliff was publicly signaling its next expansion. A Director of Compliance job posting said the company was preparing “upcoming prediction market initiatives” and wanted the hire to lead its CFTC compliance strategy across a business spanning social sportsbook, DFS and prediction markets.
Fliff said the compliance director would “structure event contracts and prediction market products,” including contract terms and market integrity rules, and “lead regulatory registrations, applications, and filings under FCM frameworks.” The posting also called for experience with the Commodity Exchange Act and CFTC and NFA rules governing event-based products.
The Aug. 12 NFA filing now puts those plans into motion. What remains unclear is which DCM would list the contracts Fliff intends to offer, when the product could launch, and whether prediction markets would be integrated into the existing Fliff platform. The company has not yet publicly announced an exchange partner.
Onyx adds another piece to its prediction market plans
Onyx Odds appears to be further along in a similar transition. The social/sweepstakes sportsbook already has a federally registered affiliate, Onyx Predictions LLC, which became an Introducing Broker (IB) and NFA member on May 20. The IB is guaranteed by NinjaTrader Clearing, which carries customer accounts and funds. But Onyx’s regulated prediction market product has not yet broadly launched. Its website currently invites users to “sign up for early access” and request access to a private beta.
The company had already signaled plans to build out its federal regulatory structure. An indexed version of an April job posting for a Regulatory Operations Associate said the hire would “own and drive CFTC licensing efforts (DCM, FCM, IB as applicable)” and help Onyx “get licensed and operate in regulated markets.” Onyx had also announced a partnership with Polymarket last November to launch CFTC-regulated sports event contracts.
On Aug. 12, another affiliate, Onyx Markets LLC, filed with the NFA for FCM registration, NFA membership and swap-firm approval, with all three applications shown as pending.
The filing comes less than two months after Payward, the parent of Kraken and NinjaTrader, led a $20 million Series A funding round that valued Onyx at $220 million. Onyx said at the time that it would use Payward’s regulated U.S. derivatives infrastructure to power its prediction market offering. Why Onyx is now seeking its own FCM registration despite the existing infrastructure relationship is unclear, though approval could give the company greater control over the customer-facing side of its regulated business.
The partnership is also set to expand Onyx beyond sports and prediction markets. Its website says direct crypto trading is coming this fall and advertises access to more than 500 tokens, while the Payward deal specifically calls for embedding crypto trading inside the Onyx app alongside the federally regulated prediction market offering.
Two sweeps sportsbooks have already made the jump
The ProphetX and Novig transitions also show what the federal route can mean for geographic reach. Before its June relaunch, ProphetX said its sweepstakes product was available in about 40 states. Its federally regulated exchange launched in 49 states, with only Nevada excluded from its availability map. The move provided the first example of a sports-focused sweepstakes platform converting to the federal prediction market framework.
Novig’s sweeps rollout initially reached 42 states and Washington, D.C., but by January its footprint had narrowed to 36 states and D.C. Its regulated platform is now available in 47 states, with Arizona, Michigan and Nevada excluded. The transition did not require rebuilding the exchange from scratch. Shortly after Ludlow received CFTC approval, Novig co-founder and CTO Kelechi Ukah told DeFi Rate that the designation “doesn’t start a build for us, it simply turns the regulated layer on top [of] our already proven infrastructure.”
When Novig completed the switch in August, it retired the redeemable Novig Cash and nonredeemable Novig Coins used under its sweeps model and moved trading entirely to U.S. dollars. ProphetX likewise describes sweepstakes as its former model following its federal relaunch. Whether Fliff and Onyx intend to make the same clean break remains unclear.
Two paths to federal access face familiar state challenge
Novig and ProphetX took a more ambitious regulatory route than the operators now pursuing FCM or IB registrations. They control their own DCMs, allowing them to create and list sports contracts directly, while Fliff, Onyx and Rebet could instead distribute contracts listed by an outside exchange. The result is two different paths emerging for sweeps sportsbooks looking to move into the federal market.
The broader reach is not guaranteed to last. Some of the same states that have spent the past couple of years restricting sweepstakes sportsbooks are now challenging federally regulated sports event contracts, arguing that the products violate state gambling laws despite CFTC oversight.
For sports-focused operators making the jump to prediction markets, the federal framework may offer a wider starting map than sweepstakes, but the boundaries of that access are still being contested in courts and regulatory proceedings across the country.
