A Minnesota Senate committee advanced a bill to the Senate floor that would prohibit most event contracts. Sponsor Sen. John Marty said the contracts do not comply with local laws; the report says the CFTC has challenged states’ efforts to regulate prediction markets.
The bill could restrict prediction-market operators’ ability to offer event contracts in Minnesota.
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The American Gaming Association and other trade groups are urging US lawmakers to prohibit sports-related trading on prediction markets. The groups argue that the Commodity Futures Trading Commission has exceeded its authority, while bipartisan legislation introduced in March would bar the agency from permitting sports and casino-style event contracts.
Player unions representing the NFL, MLB, NBA, MLS and NHL asked the CFTC to bar contracts based on negative outcomes or events manipulable by one person. In a submission to the agency, they cited athlete safety and sports integrity risks; the CFTC’s comment period drew more than 1,500 submissions.
It was reported that Judge Katherine Menendez blocked Minnesota’s planned ban on most event contracts. Former senator Chris Dodd disputed the ruling’s interpretation of a rule he said should prohibit sports contracts.
Panelists at the Next Predict Summit in New York argued that states should not apply gaming laws to sports event contracts traded on federally regulated exchanges. Courts have split on whether the contracts are swaps under the Commodity Exchange Act, and the Supreme Court case involving New Jersey is pending.
Panelists at the Next Predict Summit in New York said states should not apply their gaming laws to sports event contracts traded on federally regulated designated contract markets. The panel discussion, titled "The Jurisdiction Gap: One ruling, Two Very Different Markets," took place on Friday. The industry position is that the contracts are federally regulated derivatives, and that the Commodity Exchange Act gives the Commodity Futures Trading Commission explicit jurisdiction over the transactions.
Crypto.com and Novig have sued Missouri officials in federal court to stop the state enforcing its sports betting laws against their sports event contracts. The suits were filed on Friday as 30-day deadlines expired for six prediction market operators ordered by Attorney General Catherine Hanaway to stop offering the contracts or obtain state authorisation. Crypto.com argues the Commodity Exchange Act gives the CFTC exclusive jurisdiction.
Crypto.com and Novig have taken Missouri officials to federal court in an effort to block enforcement of the state's sports betting laws against their sports event contracts. The suits arrived on Friday, the same day that 30-day deadlines ran out for six prediction market operators told by Missouri Attorney General Catherine Hanaway to halt sports event contracts or secure state authorisation.