CFTC questions Super Bowl contracts of Crypto.com and Kalshi
The Commission is allowed by statute to request additional information from companies that
Key Points
- The CFTC voted in January to put Crypto.com’s sports contracts under a special regulatory review to determine if the agreements qualify as gaming
- The Commission is expected to vote on whether to bar the contracts sometime during April 2025, but the deals will still be in effect until a decision is announced
The Commodity Futures Trading Commission (CFTC) has requested both Crypto.com and Kalshi verify how its recently launched Super Bowl LIX contracts comply with regulatory requirements.
The Commission is allowed by statute to request additional information from companies that “self-certify” its financial products, including a demonstration to ensure regulatory requirements can be met and no manipulation can be conducted. It then evaluates the responses and decides whether to take any enforcement actions or begin drafting a new rule.
After conducting a vote during January to put Crypto.com’s sports contracts under a special regulatory review to determine if the agreements qualified as gaming, the Commission is expected to vote sometime during April 2025 on whether to bar the contracts. Until a decision is made, however, the agreements continue to be in effect.
Kalshi’s contracts were not put under the same regulatory review and it was not stated by the CFTC as to when a decision would be made on if the agreements will be barred. As a result, however, Robinhood will be suspending the rollout of its professional football championship market, which was made possible through a collaboration deal with Kalshi.
The CFTC sent a request to Robinhood directly asking that it restricts customer access to the sports event contracts, including the new market, and that both sides will work together to gain a better understanding of the Commission’s concerns.
Good to know: The AGA has estimated that $1.39bn will be wagered on Super Bowl LIX, which is significantly less than the $23.1bn estimated for last year’s edition of the game
Towards the end of 2024, Crypto.com began offering sports-related event contracts, a type of derivatives contract that lets bettors wager on yes or no-type props. The CFTC was reportedly caught off guard by the December 23 launch, and began discussions that eventually led to the special regulatory review.
Super Bowl LIX will be played between the Philadelphia Eagles and Kansas City Chiefs on February 9 from the Caesars Superdome in New Orleans, Louisiana.
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