US DFS operator Sleeper has filed a civil suit against the Commodity Futures Trading Commission (CFTC) over allegations the body blocked the firm’s path to becoming a licensed prediction market.
The suit was filed in the US District Court of DC, with Washington-based law firm Milbank representing the operator.
Sleeper alleged the CFTC had “unlawfully blocked” its application for a futures commissions merchant (FCM) licence, and in turn “unfairly” favoured Sleeper’s competitors.
The lawsuit also includes Caroline Pham, who is the current head of the CFTC.
Sleeper said the “unreasonable delays and a complete lack of communication” from the agency called into question its commitment to “innovation and free markets”.
The securing of an FCM licence would allow Sleeper to launch a prediction market offering by partnering with a DCM (designated contracts market) licence holder.
For example, Robinhood holds an FCM licence and is able to offer Kalshi’s markets through its app. Kalshi is the DCM holder.
Sleeper argued the CFTC “meddled in the long-established and straightforward FCM approval process” and thereby prevented the firm from securing the licence.
The National Futures Association (NFA) approves FCM applications on behalf of the CFTC. Sleeper initially submitted its application in May 2025, before being all but approved in August.
However, Sleeper claimed the CFTC told the NFA to block the application and not give full approval.
“Sleeper’s application has sat idle for more than a month, with no notice of deficiencies, no hearing and no lawful explanation. Further complicating the matter was the NFA’s approval of an FCM licence to PrizePicks – a direct competitor – while the NFA unreasonably delayed Sleeper’s application,” the lawsuit stated.
PrizePicks, another US DFS firm, received its FCM licence earlier this month. It also sold a majority stake in its business to Allwyn in a $1.6bn deal.
Sleeper’s lawsuit requested an injunction be placed on the CFTC to prevent it “interfering” in the operator’s quest for a licence, and that the court deem the CFTC’s “interference unlawful as an unreasonable withholding of agency action”.
Nan Wang, Sleeper CEO, said: “The CFTC’s unlawful actions present an unfair competitive hurdle to a growing US industry.
“This is about more than just one app. It’s about whether these innovative new American markets are truly governed by transparent and fair rules or by a single decision maker picking winners and losers.”
The post Sleeper files civil suit against CFTC over “unlawful” delays first appeared on EGR Intel.
DFS firm says regulatory body has “unlawfully blocked” its application to take on an FCM licence and expand into prediction markets
The post Sleeper files civil suit against CFTC over “unlawful” delays first appeared on EGR Intel.