Prediction markets are drawing a new wave of attention as sportsbooks, daily fantasy firms and crypto exchanges edge deeper into event contracts—either by buying CFTC‑approved businesses or partnering with those that already have the green light. At the same time, a crop of smaller startups is racing to carve out space with fresh funding, novel products and bolder distribution strategies that blend finance, social platforms and crypto rails.
This is no longer a niche. With venture dollars returning and new regulatory strategies emerging, prediction markets could look very different in the year ahead—spanning regulated CFTC venues, SEC‑adjacent experiments and crypto‑native platforms that target global users while tiptoeing through compliance.
The landscape: regulated incumbents, rising challengers and a shifting rulebook
U.S. event‑contract venues sit under the Commodity Futures Trading Commission’s umbrella. Some big names in sports and crypto are leaning in by acquiring CFTC‑approved operators or striking partnerships, while top players such as Kalshi and Polymarket have drawn substantial backing from Wall Street and venture capital.
The growth is catalyzing a second act: leaner teams raising single‑digit millions to test faster markets, AI‑driven creation tools and social distribution. For founders, crypto infrastructure offers a way to build prediction markets outside traditional perimeters—though accepting U.S. customers without clear approval can invite regulatory risk. A few are even exploring whether the Securities and Exchange Commission might offer a different route for certain product designs.
New players reshaping prediction markets
Below are the early‑stage entrants trying to redefine the space—from sports “securities” to one‑minute stock calls and AI‑generated event creation.
- InPlay Global
- Thesis: Build a “Sports Performance Securities marketplace.”
- Regulatory tack: Seeking SEC registration for a platform that lets users buy or sell exposure to a team’s season performance—likened to ETFs in the company’s materials.
- Status: The SEC has not indicated whether it will permit the product. Without approval, the marketplace remains offline.
- Why it matters: If successful, InPlay could open a novel regulatory path for sports event trading outside the CFTC’s event‑contract regime, setting a precedent for how prediction markets intersect with securities law.
- Limitless
- Product: Short‑term markets on specific stock and crypto prices—30‑minute and 60‑minute “above/below” outcomes, with plans to introduce 15‑, 10‑ and even 1‑minute windows.
- Funding: Raised $10 million in seed funding led by 1Confirmation.
- What’s new: One‑minute markets would be the most casino‑like cadence yet in prediction markets tied to listed assets, blurring the line between gamified trading and traditional speculation.
- Watch item: Distribution and compliance strategy will determine how fast Limitless can scale in the U.S.
- Slips
- Edge: Uses AI to automate market creation, audit outcomes and resolve bets, driven by “real‑time trends.”
- Footprint: Operates in 43 states, describing itself as a “social betting exchange,” which it says is distinct from unlicensed gambling.
- Funding: $1.6 million pre‑seed led by Watertower Ventures; backers include venture firms, sports team owners, Web3 founders and six‑time WSOP champion Jason Mercier.
- Quote: “This launch isn’t just about adding more ways to play — it’s about creating limitless action,” the company said, underscoring its AI‑first approach to prediction markets.
- Melee
- Pitch: “Viral markets” that reward users “for being early or being right.” Odds are longer when a market opens and shorten over time, echoing meme token dynamics.
- Funding: $3.5 million from Variant Fund and DBA.
- Audience: Targets creators and influencers who may monetize their communities by seeding markets and sharing early views.
- Quote: CEO Max Lawrence says, “At first, Melee will seem like the degen’s prediction market,” leaning into crypto culture while promising asymmetric upside for early participation.
- Launch: Debuted its first market this week tied to a prime-time NFL matchup.
- The Clearing Company
- Team: Led by veterans from Polymarket and Kalshi, including former growth leaders and markets leads.
- Funding: $15 million in August from Union Square Ventures and Coinbase, which has hinted at its own interest in prediction markets.
- Plan: Build a regulated exchange with transactions recorded on a blockchain, covering “crypto, politics, sports, culture & more.”
- Status: Not yet launched. Positioning suggests a compliance‑first architecture to compete with CFTC‑approved incumbents.
- Competi
- Distribution: Embeds prediction flows directly into TikTok, Telegram and Discord—meeting users where they already gather.
- Product tilt: Focus on parlays via request‑for‑quote, which the team likens to leveraged trading in finance due to higher potential upside.
- Status: Not live; users can join a waitlist. The model leans into the creator economy and social chat monetization.
- Opinion.Trade
- Focus: Macro indicators such as unemployment and inflation—moving beyond sports and entertainment.
- Funding: $5 million led by YZi Labs.
- Vision: “Transforming prediction markets from entertainment‑driven speculation into a critical layer of economic intelligence.”
- Status: Invitation‑only phase as it readies a broader rollout.
- Kizzy
- Category: Free‑to‑play app where users wager on influencer activity, with a real‑money version “coming soon.”
- Funding: $2.7 million in August (PitchBook).
- Open question: How it will handle rights, partnerships and approvals as it moves from demos to paid markets.
Regulation watch: how prediction markets navigate CFTC and SEC lines
Prediction markets in the U.S. generally fit within the CFTC’s oversight when they resemble event contracts. Many large brands entering the space are partnering with or acquiring entities that have approval to operate, a sign that compliance is top of mind. That said, the perimeter is evolving:
- CFTC route: Traditional U.S. event markets seek listing approvals and operate within prescriptive guardrails around product type, event categories and retail access.
- SEC route: Rare for event‑style products, but InPlay’s “sports performance” concept shows founders are testing securities law frameworks for certain designs.
- Crypto route: Teams may build offshore or restrict U.S. access while using public blockchains for settlement. Accepting U.S. customers without clear approval can trigger enforcement risk, so geofencing and KYC controls are common.
For users, access often depends on location. For founders, regulatory clarity can be a competitive advantage that reduces cost of capital and speeds up enterprise partnerships.
Product design trends shaping the next phase
Three themes stand out across the new crop of platforms, each with implications for how prediction markets evolve:
- Faster resolution and gamified cadence
- Markets that settle in 60, 30 or even 1 minute promise continuous engagement. They also raise questions about user protections and suitability when products look more like games than investments.
- AI‑driven creation and resolution
- Slips and others deploy AI to propose markets, monitor feeds and adjudicate outcomes. That can scale supply and improve speed, yet it puts a premium on transparent data sources, robust audit trails and appeal mechanisms.
- Social and embedded distribution
- Competi’s chat‑native approach and Melee’s creator incentives highlight a pivot from “come to our exchange” to “we bring prediction markets to where you already are.” Success will hinge on trust, frictionless onboarding and clear disclosures inside fast‑moving social streams.
A fourth, quieter trend is compliance‑centric infrastructure: The Clearing Company’s blockchain‑recorded, regulated exchange blueprint mirrors how capital‑markets startups are threading innovation with oversight.
Why this matters for investors, fans and data wonks
If the current trajectory holds, prediction markets could expand beyond entertainment and speculation into real‑time signals on everything from product launches to policy outcomes. That is the Appeal of opinion‑driven markets at scale: when built well, they can turn dispersed expectations into tradable, time‑stamped probabilities.
Potential benefits:
- Better price discovery on events that matter to businesses and policymakers
- New monetization for creators and publishers via embedded markets
- Richer data for researchers modeling expectations across sports, macro and culture
Practical risks:
- Suitability and responsible‑use concerns as markets speed up
- Regulatory friction where products straddle futures, securities and gaming rules
- Data quality and dispute resolution when AI oracles drive settlement
The net effect is that prediction markets are moving from niche curiosity to a broader stack of tools, entertainment and intelligence—if guardrails keep pace.
Funding momentum returns, but discipline matters
While these startups haven’t raised the nine‑figure rounds seen by top incumbents, checks are coming in:
- $10 million for Limitless to speed product iteration and shorter markets
- $5 million for Opinion.Trade to expand into macro forecasting
- $3.5 million for Melee to launch viral markets with creator hooks
- $2.7 million for Kizzy’s influencer‑activity bet‑on‑content model
- $1.6 million pre‑seed for Slips’ AI‑driven engine
- $15 million for The Clearing Company’s regulated exchange build
For investors, the questions are straightforward: regulatory path, unit economics, cost of user acquisition, churn across short‑duration products and the durability of creator‑driven demand.
What each model needs to prove next
- InPlay Global: Can sports “securities” fit within SEC frameworks without morphing into traditional derivatives—and will the agency approve a first‑of‑kind product
- Limitless: Can ultra‑short windows retain users responsibly while satisfying compliance teams and distribution partners
- Slips: Will AI creation and resolution stand up under volume, appeals and edge‑case events
- Melee: Can viral markets grow beyond crypto‑native “degen” circles into sustainable creator ecosystems
- The Clearing Company: Will a regulated exchange with on‑chain records unlock institutional partnerships and category breadth
- Competi: Can embedded prediction markets in TikTok, Telegram and Discord convert viewers into repeat traders without adding friction
- Opinion.Trade: Will macro‑focused prediction markets prove valuable to analysts and businesses as a live “economic intelligence” layer
- Kizzy: Can influencer‑linked markets scale with clear rights, risk controls and transparent rules
Each path points to a different future for prediction markets—regulated financial products, social gaming overlays or real‑time research tools.
Voices from the field
- Melee’s Max Lawrence: “At first, Melee will seem like the degen’s prediction market,” emphasizing asymmetric upside for early participation as a hook for crypto‑savvy users.
- Slips on its AI engine: “This launch isn’t just about adding more ways to play — it’s about creating limitless action,” positioning automation as the growth lever.
Established players and large brands are watching closely. CFTC‑approved venues offer a faster route to mainstream distribution with clearer guardrails, while crypto‑native platforms iterate quickly on product mechanics and community features. The middle ground—regulated exchanges that use blockchain for record‑keeping—may be where institutional demand meets modern architecture.
What to watch next
- Approvals and guidance: Any CFTC or SEC updates that clarify where event contracts begin or end
- Product launches: Speed of rollouts from Melee, Competi and Kizzy, and how they gate U.S. access
- Partnerships: Sports leagues, creators and fintechs that can accelerate user acquisition
- Data quality: How AI‑driven resolution systems handle disputes and edge cases
- Monetization: Take rates, market‑maker incentives and the sustainability of short‑duration products
As the rulebook evolves, expect more hybrid approaches that blend compliance, social reach and crypto infrastructure.
Bottom line
The new class of startups is pushing prediction markets into their next phase—faster, more social and more data‑driven—while incumbent, regulated venues broaden access through partnerships and acquisitions. The winning models will be the ones that align product velocity with responsible safeguards and regulatory clarity. For now, the category is wide open, and the next few quarters will show whether these concepts move from hype to habit.
Article Source: Yahoo Finance
Image Source: Pixels
