The United States Commodity Futures Trading Commission (CFTC) is apparently looking investigating Crypto.com’s recently introduced betting contracts linked to major sporting events, including the Super Bowl. The agency is looking into whether these contracts, which allow users to gamble on outcomes such as the championship game, violate existing gaming regulations.
According to reports, the CFTC’s five commissioners will vote on whether to conduct a 90-day examination of the contracts. If these contracts are judged to be in violation of regulations, this judgment may result in a permanent ban on trading.
Crypto.com, a U.S.-based derivatives market, notified the CFTC of the contracts’ introduction in December 2023, but the agency was unable to approve them before the holidays. Despite the date, Crypto.com went ahead with the launch, citing the need to capitalize on Super Bowl betting opportunities and any delays caused by a government shutdown.
The contracts let users to place bets on the outcomes of major football events, including college and NFL games. While these contracts can not directly refer to specific events like the Super Bowl due to trademark problems, they do allow users to wager on them using words like “Bowl games” and “Pro Football Championship.”
The CFTC’s probe is part of a larger effort to oversee the growing market for event contracts, which are popular among decentralized betting sites. These platforms enable users to wager on a variety of events other than sports, such as political events and even speculative events like public speeches.
As the CFTC prepares for a leadership change, the timing of any possible probe is key. Chairman Rostin Behnam, who has been a prominent critic of such contracts, will step down in January, and a more crypto-friendly commissioner could take his place. Crypto.com has voiced unhappiness with the CFTC’s actions, arguing that the next leadership should determine the future of such markets.
While the inquiry is ongoing, the conclusion of this assessment might have significant consequences for the broader market for event-based derivatives, particularly given the growing convergence of bitcoin and sports betting.
