Sports betting is turning into sports trading.
And the rush to cash in just added another player.
On Tuesday, the CFTC cleared Novig to run a federally regulated sports prediction market. ProphetX got the same green light a week earlier.
The timing isn't random. The World Cup and NBA Finals pushed Kalshi to a record on Saturday.
It cleared $1.2 billion in trades in a single day. Robinhood's prediction markets boss called the moment a "supercycle."
A packed sports calendar runs straight into NFL season and the midterm elections. A prediction market works a lot like a futures contract, where the price rises and falls with the odds.
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Novig wants to stand out by going after the sportsbook itself. Co-founder Jacob Fortinsky says users trade against each other, not the house.
"We're really rendering sportsbooks obsolete," he told CNBC.
His pitch is simple. Cut out the middle man, and let fans trade odds directly.
The platform also keeps a 21-and-up age limit. And it has the money to grow.
Novig raised $75 million in February, led by Pantera Capital. That round valued it at $500 million.
The firm says it has handled more than $5 billion in trades so far. That works out to about $8 billion a year.
Some traders now treat sports like an asset class, buying and selling odds the way they trade stocks.
Here's the catch. Everyone is racing for the same prize, but the money sits in one place.
Over the weekend, Kalshi did $3.38 billion in volume. That dwarfed Polymarket's $1.41 billion and Robinhood's $131 million.
Traders go where the action already is, and that lead tends to snowball. So Novig and ProphetX aren't just fighting FanDuel and DraftKings.
They're fighting Kalshi's head start. The giants aren't standing still, either.
DraftKings said its own prediction product just had its biggest weekend yet. Betr, backed by YouTube star Jake Paul, is pushing in too.
ProphetX says it's the first sports market to clear its own trades. Crypto.com and FanDuel are teaming up on contracts as well.
The legal ground is still shaky. States and tribes are suing Kalshi and others, calling these markets unlicensed gambling.
The CFTC is fighting back, and it even sued New Mexico this week. It has also floated rules that would block bets on injuries, refs and other touchy topics.
If courts treat these as financial contracts, they can grow nationwide. If they're ruled to be bets, they get pushed back state by state.
Some insiders wonder how many of these platforms can last. The winners will likely be the ones with the deepest pools of traders.
The approvals are piling up faster than the rules.
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