Super Bowl Bets on Crypto.com Poised for CFTC Review of Legality

Super Bowl Bets on Crypto.com Poised for CFTC Review of Legality

Federal regulators are considering whether to investigate the legality of futures contracts listed on Crypto.com that allow investors to bet on the outcomes of major football games, including the Super Bowl.

The Commodity Futures Trading Commission (CFTC) is currently in the process of voting on whether to place these contracts under a 90-day review. However, the CFTC does not have the authority to immediately halt trading, meaning that any potential ban would come after the Super Bowl, scheduled for February 9. If the contracts are found to violate gaming laws, the CFTC could prohibit them after completing its review.

Crypto.com, which launched the football contracts on its Chicago-based derivatives exchange, notified the CFTC of its plans in December 2023. However, the agency did not have enough time to review the contracts before the holiday season and potential government shutdowns. The contracts are tied to the outcomes of college and NFL games, though the company avoids using official game names on its website or social media. On its app, traders aged 18 and older are encouraged to bet on events such as the Kansas City Chiefs or Baltimore Ravens winning their respective games, including the AFC Championship and the Super Bowl.

The review highlights the regulatory challenges the CFTC faces as companies in the growing event-contracts market push the legal limits. This follows a similar situation with Kalshi Inc., which paused trading on a controversial contract involving the potential plea of the alleged assassin of UnitedHealthcare's CEO after receiving guidance from regulators.

Despite the ongoing scrutiny, Crypto.com has not received official notice of the potential review and expressed disappointment over the CFTC’s actions. "It is disappointing that the current CFTC leadership would consider this action while not allowing the incoming leadership to determine how free markets operate," a spokesperson for the company said.

In 2021, the CFTC nearly rejected similar football-related contracts from ErisX, though the proposal was withdrawn before a vote could take place.