Smarkets to take a punt on American prediction markets

With 1m active accounts and annual revenues of about $32m, Smarkets, an event-based contract exchange, is arguably a close second to Betfair in the UK prediction marketplace.

- Matthew Bishop

Now it has its sights set on the US, where there has been a boom in prediction markets in the past 18 months."The Trump administration is very proactive in promoting innovation, and the regulator has taken a pragmatic approach to new entrants," says Smarkets CEO Jason Trost. He is optimistic that the Commodity Futures Trading Commission (CFTC) will approve Smarkets to open by the end of this year, if not sooner.

Trost sees a huge opportunity across the Atlantic where millions of Americans have recently joined the craze for deploying money on platforms such as Kalshi and Polymarket. They can trade "event-based contracts" on everything from coming election outcomes and the length of the war with Iran to the winner of the March Madness basketball tournament.

Trost quit his trading job at UBS in New York to start the firm in London in 2008 because prediction markets were then illegal in the US. A self-described left-leaning political junkie, his interest in prediction markets was piqued in 2004 by a now defunct Irish site offering real-time predictions on the George W Bush v John Kerry presidential race.