Sleeper Markets Takes CFTC to Court Over Futures Roadblock
Fantasy sports platform Sleeper Markets has filed a lawsuit against the U.S. Commodity Futures Trading Commission.
LISTEN TO THIS ARTICLE:The platform is accusing the agency of illegally blocking its application to become a registered futures commission merchant.
The suit, lodged in federal court in Washington, D.C., targets the CFTC and its acting chair, Caroline Pham, for what Sleeper calls unlawful meddling in a routine approval process.
The case stems from Sleeper's May 2025 application to the National Futures Association, the industry group that handles such registrations. NFA records show the company completed the process by August, and staff there indicated approval could come as early as September 4.
However, Sleeper alleges the CFTC stepped in at the last moment, directing the NFA to halt the green light and reroute the application for the agency's own scrutiny. The company claims this move, driven by "unspecified concerns" about Sleeper's exchange partner, violates decades of established rules that keep self-regulators independent.
Sleeper’s Grievances Against the CFTC
This lawsuit builds on an earlier complaint Sleeper lodged in July, where it first raised alarms about CFTC interference. In the new 24-page filing, Sleeper lays out a timeline of delays and communications that, in its view, show the agency overstepping its role.
According to court documents filed by Sleeper’s legal team, “this case is about the CFTC flagrantly ignoring applicable law, regulations, and decades of practice to block, without process or explanation, what should have been a routine application to serve as a broker in the derivatives markets.
Sleeper said “the arbitrary and capricious nature of the CFTC’s actions” is “cutting off access to, and limiting the growth of, those markets without cause, and at great harm to Sleeper, which is not only being deprived of its due process rights but also losing significant business opportunities.”
Sleeper's push into predictions reflects its evolution from a niche fantasy app to a broader betting contender. While founded in 2015, the San Francisco-based company has built a loyal base by offering user-friendly contests on games like NFL matchups. Now, with prediction markets surging, fueled by bets on elections, weather, and sports, Sleeper sees an opportunity to let its users wager directly on outcomes, much like they do with daily lineups.
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Growing Interest in Prediction Markets
The CFTC has not publicly responded to the suit as of September 30, but its recent moves suggest a cautious thaw toward predictions. Just weeks ago, the agency lifted a 2022 ban, allowing Polymarket to resume U.S. operations.
Giants like FanDuel and DraftKings are eyeing similar entries, drawn by the sector's rapid growth in sports-related contracts. Sleeper's legal team points to this as evidence of the CFTC's inconsistent approach with granting licences as they have been greenlighting some players while stonewalling others.
The suit could force clearer guidelines on how the CFTC oversees self-regulators like the NFA, potentially speeding up approvals for startups in a field that's exploding with user interest. For Sleeper's millions of fans, the outcome might mean new ways to engage with their favorite teams.
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