This week: The Clearing Co. files CFTC application to build onchain prediction markets

The Clearing Company files CFTC application to build onchain prediction markets

The news: The Clearing Company has filed its application with the U.S. Commodity Futures Trading Commission (CFTC) to become a Derivatives Clearing Organization (DCO), marking a major step toward launching fully regulated, onchain prediction markets, WSJ first reported. The filing follows the company’s $15M seed round led by Union Square Ventures in August. If approved, The Clearing Company would offer the first stablecoin-native clearinghouse built specifically for prediction markets. The effort is led by Sam Schwartz (formerly Kalshi’s Chief Compliance Officer) who said a stablecoin-native model “allows derivatives markets to operate transparently and efficiently onchain, while meeting the same regulatory standards as traditional registrants.”

Zoom in: Rather than launching a consumer platform out of the gate, The Clearing Company is building the underlying regulated plumbing for the category—clearing, settlement, and exchange infrastructure that others can build on top of. The team, which includes several ex-Polymarket staffers, expects to file for a CFTC exchange license next, with eyes on a late-2026 launch. The company continues to frame prediction markets as “a new kind of news,” arguing that live, incentive-aligned forecasts require compliant, scalable market infrastructure. By going straight at the regulatory foundation rather than operating in gray zones, the team aims to unlock broader participation, deeper liquidity, and long-term regulatory durability.

Why it matters: The application comes as more firms test whether event contracts can operate inside federal derivatives frameworks rather than in legal gray zones. A DCO license is an early but important step toward that model, and one that other entrants like Kraken and ProphetX are also pursuing. The momentum suggests a shift toward more formal market infrastructure for onchain prediction markets, even as state-level interpretations—especially around sports outcomes—continue to shape where and how these products can ultimately be offered.

Flows is building the gaming industry’s version of Zapier

The news: On this week’s BettingStartups Podcast, Flows CEO James King explained how the mounting frustration across iGaming teams who can’t get ideas out the door became the impetus for his company. With roadmaps clogged and engineering time scarce, even simple product tweaks can take months. King said the pattern was everywhere: “We were seeing operators being frustrated and not being able to get certain products to market fast enough… Even the suppliers… knowing what they wanted to do, and yet again, not being able to do it fast enough.” He and co-founders Mike Broughton and Andrew Doublesin set out to build a tool that gives teams the autonomy they don’t get from legacy stacks. “We need to build an innovation platform, a tool to allow companies and people to innovate at speed,” King said.

Zoom in: Flows launched in 2021 with a no-code automation engine that plugs into an operator’s real-time event stream (game spins, deposits, logins, payments) and lets non-technical teams build everything from workflows to full-blown products. “Off the back of these real-time events… you are able to build in a really easy, user-friendly interface, which, in turn, become products,” King said. The platform is similar to Zapier, but is built for gaming’s volume: “Real time volume in our space is hundreds of millions, billions of triggers daily… a tool like Zapier will fall over.” That flexibility has enabled use cases spanning CRM journeys, fraud alerts, jackpots, bonus engines, and omnichannel loyalty systems. Flows is now deploying with major U.S. operators, including a recent launch with Fanatics via Light & Wonder—a rollout King described as “really quick from concept through to delivery” and part of a “strong year of traction.”

Why it matters: Flows’ rise speaks to a broader shift: operators are prioritizing speed and autonomy as competitive differentiators. Light & Wonder’s 2024 strategic investment underscores that trend—King said the value was in acceleration, noting L&W has already taken multiple Flows-powered products to market. Despite deep roots in gaming, King frames Flows as “a tech company in the gaming space,” with infrastructure that could extend into fintech or retail—but emphasized the gaming opportunity alone remains huge. Looking ahead to 2026, Flows plans to expand its U.S. footprint and push into agentic-AI product development while staying focused on its core mission: “empowering more people to innovate… to have a really awesome and wonderful thought and be able to build and act on that.”

Listen to the full podcast on YouTube, Spotify, and Apple Podcasts.

News, money, and alpha

• Zero Labs has opened applications for its seventh Innovation Launchpad Cohort, a mentorship-driven accelerator, and is on the hunt for startups shaping Las Vegas’ future economy.

• Kalshi is now valued at $11B after securing a $1B financing round led by returning backers Sequoia and CapitalG, according to a TechCrunch report.

• Defy the Odds and Drive by DraftKings are hosting a December 4 AMA, offering female founders a chance to connect directly with leaders in sports tech and entertainment—register here to secure your spot.

From the studio

Catch up on the latest episodes of The BettingStartups Podcast.

• Building 'Zapier for iGaming' w/ James King from Flows

• The future of racing w/ Daniel O' Sullivan & Sebastian Butterworth

• Finding a forever home as a prediction market w/ Jake Benzaquen from ProphetX

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