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US Senate Democrats urge CFTC to maintain sports event contract restrictions

Regulation

Twenty-three Senate Democrats asked Commodity Futures Trading Commission chair Michael Selig on Friday to reconsider his support for prediction markets offering contracts on sports outcomes. Earlier in February, the CFTC withdrew a proposed rulemaking that included sports events in the definition of gaming; the senators urged the agency to retain restrictions on such contracts if it starts a new rulemaking.

Any change to CFTC rules could affect whether prediction-market platforms can offer sports contracts in the US.

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Regulation

Two prediction-market operators sue Missouri over sports event contract rules

North American Derivatives Exchange, which operates Crypto.com's OG prediction market, and Ludlow Exchange, Novig's operator, filed separate lawsuits on 16 October challenging Missouri's 21-year age minimum and 10% tax on sports event contracts. Both argue that federal commodities law gives the CFTC authority over their contracts, pre-empting state gambling rules, after a 30-day compliance period following cease-and-desist notices expired. Missouri Attorney General Catherine Hanaway's office maintains that labelling a sports bet an event contract does not remove it from state law.

North American Derivatives Exchange, which operates Crypto.com's OG prediction-market platform, and Ludlow Exchange, the operator behind Novig, filed separate lawsuits on 16 October challenging Missouri's sports event contract rules. The filings followed the expiry of a 30-day compliance period set out in cease-and-desist notices. Both companies argue that federal commodities law gives the Commodity Futures Trading Commission authority over their contracts, putting them outside Missouri's gambling requirements.

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