Binance.US intends to apply for a federal license that would enable it to offer prediction markets to customers across the United States. CEO Steve Gregory announced the plan at the Rare Evo blockchain conference held in Las Vegas this week.

Gregory stated that Binance.US will submit an application for a Designated Contract Market (DCM) license from the Commodity Futures Trading Commission (CFTC) in August. As of Wednesday, the CFTC had no record of a pending application from the company. DCM applications undergo a comprehensive CFTC review that evaluates the exchange's rules, surveillance systems, and compliance infrastructure before approval.

A DCM license would authorize Binance.US to list futures, options, and event contracts under federal oversight, adding a new business line beyond its existing spot crypto trading services. The initiative builds on remarks Gregory made earlier this month, when he indicated the company aimed to pursue licenses for derivatives, perpetual futures, and prediction markets as part of a broader expansion strategy.

A Crowding Field of Licensed Operators

If approved, Binance.US would join a small but growing group of federally licensed prediction market operators. Kalshi and Polymarket US already operate in this space, and Gemini received its own CFTC license earlier this year.

Coinbase has entered the market through a partnership with Kalshi that offers event contracts to US users. Robinhood has also discussed adding prediction market contracts from Crypto.com to its brokerage app, according to a recent Wall Street Journal report.

For Binance.US, the move is part of a larger recovery effort. The company faced CFTC and SEC enforcement actions in 2023 that disrupted its banking relationships and contributed to a sharp decline in its business. Gregory has said he wants to rebuild the roughly 20% share of the US crypto exchange market that the company once held before those regulatory challenges.

Robinhood's Event Contract Surge

Robinhood's recent earnings illustrate how quickly the prediction market sector is expanding. The company reported $156 million in event contract revenue last quarter, more than ten times what it generated a year earlier. Customers traded over 13.6 billion event contracts during the quarter, making event contracts Robinhood's fastest-growing source of transaction-based revenue. Prediction markets drew mainstream attention during the 2024 US election cycle, when platforms saw record trading volumes on political outcomes.

Robinhood's crypto trading revenue, by contrast, fell 38% year over year. Nevertheless, event contracts and other products helped drive total quarterly revenue to a record $1.31 billion.

Unresolved Legal Battles Over Sports Event Contracts

Legal questions remain unsettled even for licensed operators. Several states contend that sports-related event contracts should fall under state gambling laws regardless of federal oversight.

That dispute intensified this week when a federal judge in Wisconsin ruled against the CFTC's request to block the state from enforcing its gambling laws on platforms including Kalshi, Polymarket, Crypto.com, Robinhood, and Coinbase. Judge William Griesbach stated that the CFTC failed to demonstrate that sports contracts count as swaps under federal law. The CFTC plans to appeal the ruling.

Other courts have reached different conclusions. Minnesota temporarily blocked its own ban, while courts in New York, Michigan, and Washington sided with state enforcement in separate cases.

The CFTC is also reviewing proposed changes to Rule 40.11, which would establish a formal review process for event contracts tied to gaming, war, and other sensitive categories. Attorneys general from 44 states have urged the agency to withdraw the proposal.

Sports leagues are divided as well. The NFL has called for stronger safeguards and longer review periods, while the NHL and MLB have signed commercial deals with prediction market platforms.

Separately, the CFTC's Division of Market Oversight reminded exchanges this week that new event contracts require detailed legal analysis and settlement terms rather than broad template filings.