Crypto.com's decision to offer Super Bowl betting has attracted scrutiny from the CFTC, the U.S. derivatives market regulator. A decision is expected after the big game on February 9.
CFTC's Examination of Super Bowl Betting
Crypto.com, in partnership with prediction market Kalshi, offers contracts for betting on the Super Bowl outcome. The CFTC, overseeing derivatives markets, requests information to assess the compliance of these contracts with U.S. derivatives laws. Although Crypto.com informed the commission back in December, regulatory feedback was not received before launch.
Betting Popularity Surges Despite Regulators
Trading activity booms despite uncertainty, with Kalshi’s Super Bowl market seeing bets exceeding $2.4 million, while a separate market for Super Bowl commercials has drawn nearly $1.5 million. However, Robinhood Derivatives, formerly partnered with Kalshi, announced a withdrawal after the CFTC ordered it to cease offering such event contracts.
Potential Market Consequences
The CFTC has recently enhanced its scrutiny of new financial products, particularly in derivatives markets. Companies must demonstrate their new trading contracts aren't manipulation-prone and comply with U.S. regulations. This case could set a precedent for how future event-based markets are regulated.
While the outcome remains uncertain, resolving such issues may significantly impact the future of market offerings like event-based betting contracts.
