Sleeper Markets Sues CFTC Over Alleged License Approval Interference

In a significant development within the sports app industry, Sleeper Markets LLC has initiated a civil lawsuit against the Commodity Futures Trading Commission (CFTC). The suit arises from allegations that the CFTC unlawfully obstructed Sleeper's application for a futures commissions merchant (FCM) license, thus threatening the company's business operations and competitive stance in the market.

Sleeper Markets, a rapidly growing sports app boasting 10 million active users, filed this lawsuit as its first in a decade of operations. The company claims that CFTC’s decision to halt their license approval process is not only detrimental to its business but also raises serious questions regarding CFTC's commitment to promoting innovation and free markets, a promise that the acting chair Caroline Pham has publicly made.

Sleeper's legal challenge highlights a troubling trend within regulatory processes. The lawsuit asserts that the CFTC has altered a well-established and effective licensing process, which traditionally involves swift approvals by the National Futures Association (NFA) upon completion of an applicant's submission. According to Sleeper, their FCM application had been submitted to the NFA in May 2025, and by August, the NFA indicated that the approval process was complete, putting Sleeper in a favorable position to expand its services just in time for the 2025 National Football League season.

However, the situation took a turn when the CFTC allegedly instructed the NFA to withhold approval, despite lacking the legal authority to enforce such a decision. Sleeper's application has now been in limbo for over a month, characterized by a disturbing lack of communication and clarity from the CFTC—no deficiencies have been communicated, and no hearing has been scheduled.

Compounding this controversy is the fact that the NFA granted an FCM license to PrizePicks, a direct competitor of Sleeper, during this period of unjustified delay for Sleeper's application. This selective approval process is claimed to create an uneven playing field, which could have far-reaching implications in a burgeoning sector fraught with competition.

According to Nan Wang, Sleeper's Chief Executive Officer, this legal action transcends the interests of a single app. “It is about whether the rules governing innovative American markets are genuinely fair and transparent, or whether they are manipulated by a singular authority deciding who thrives and who falters in the industry,” he stated, emphasizing the broader implications for market equity and entrepreneurial spirit.

The legal representation for Sleeper in this matter is Milbank LLP, which is working diligently to address what they argue constitutes an unlawful interference from the CFTC. In their request to the U.S. District Court for the District of Columbia, Sleeper seeks an injunction that would restrain the CFTC from further interfering in its quest for an FCM license and a declaration affirming Sleeper’s eligibility for registration in compliance with the Commodity Exchange Act. Moreover, Sleeper demands that the court recognize the CFTC's actions as an unreasonable withholding of agency action.

As Sleeper fights for its future, this lawsuit will not only determine its fate but will also set a significant precedent regarding the CFTC’s regulatory authority and the overall landscape of digital sports engagement platforms. In an era where the fusion of technology and sports is rapidly evolving, the outcome of this case could reshape how the market operates, balancing innovation with regulatory oversight.

About Sleeper Markets LLC

Sleeper Markets LLC stands as a pioneering platform that connects fans over sports, fostering digital communities and friendships. It has gained a reputation for rapidly growing its fantasy leagues covering various sports, including NFL, NBA, college basketball, and esports titles such as League of Legends. Sleeper aims to create an environment where sports enthusiasts can not only compete but also forge memorable experiences together. For more details, connect with Sleeper on LinkedIn or visit their website at sleeper.com.