By Anirban Sen
NEW YORK (Reuters) -InPlay Global, a new platform that allows investors to trade securities tied to the performance of sports teams, signed a partnership on Wednesday with exchange operator MEMX ahead of the launch of its trading venue next year.
The tie-up comes at a time when sports betting is booming in the U.S., bolstered by a friendlier regulatory regime under the Trump administration. Upstart trading platforms like Polymarket and Kalshi, which offer event contracts, are disrupting the sports betting business that has been dominated by gambling companies.
The growth of these prediction-market startups has triggered a backlash from the gambling industry, with some U.S. state regulators arguing that event contracts run afoul of rules on sports gambling.
Even so, large financial firms are looking to cash in on the burgeoning business of sports wagers, as they anticipate easier regulations for emerging prediction-market companies. In October, New York Stock Exchange parent Intercontinental Exchange struck a deal to invest up to $2 billion in Polymarket.
As part of the partnership with InPlay, MEMX will provide its market technology and trading infrastructure for the Miami-based firm’s planned alternative trading system (ATS), executives at the companies told Reuters. InPlay’s application for the launch of its trading venue is currently awaiting approval from the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority.
“MEMX has already built many exchanges, and they also have been contracted by a few to build ATSs. So we’re very confident in MEMX’s ability to do this for us. They’re going to be building out all of our infrastructure for us – our matching engine, gateways, market data, and network management will all be warehoused under MEMX resources,” said Troy Kane, president and COO at InPlay.
InPlay was founded in 2023 by Edwin Johnson, a former trader at the Chicago Board of Trade. The company is developing a new class of financial instruments called “performance securities,” which are structured like exchange-traded funds or index funds, and track the performance of college and professional teams across various sports through an entire season. The securities do not represent equity ownership in any team and have no affiliation with sports leagues.
Founded in 2019, MEMX operates two exchanges – MEMX Equities and MEMX Options – and is planning to launch a second options exchange next year. Over the past two years, MEMX has helped build exchanges and alternate trading systems for customers including 24X Exchange and Blue Ocean Technology.
“It’s pretty exciting to see someone try to bring something new to the market, from an asset class perspective. We like the fact that it’s a securities-based product, and so we’re excited to be able to work with the InPlay team to help them get this off the ground,” said MEMX CEO Jonathan Kellner.
(Reporting by Anirban Sen in New York; Editing by Christian Schmollinger)
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