- On Tuesday, February 4, investment giant Robinhood pulled contracts that would allow users to bet on the Super Bowl, following a request from the Commodity Futures Trading Commission (CFTC).
- Crypto.com got the same request from the CFTC, but are proceeding with their plans to expand into sports betting through Super Bowl 59.
- This could be a massive shift in online sports gambling
The Super Bowl is the biggest sporting event in the United States! There are billions of dollars wagered on the big game every year, and it is only increasing.
Two entities are trying to cause a major shift in online sports betting, as Robinhood lost a battle with the Commodity Futures Trading Commission to feature Super Bowl betting. Crypto.com, on the other hand, are still fighting the regulatory body.
Robinhood Stops Super Bowl Rollout, Crypto.com Marches On
Robinhood is an investment company that allows used to trade stocks online, and they’re also into cryptocurrency. On February 3, they announced that they would have Super Bowl prediction contracts for their users, which would allow them to bet on Super Bowl 59 odds. They did the same for US election odds in October ahead of the win for President Donald Trump.
However, just one day later, Robinhood announced that it would be stopping the rollout of those prediction contracts at the request of the U.S. Commodity Futures Trading Commission. In a statement from the CFTC, a spokesperson said:
“The CFTC has serious concerns about FCMs (future commission merchants) offering access to their customers to any contract that may not be permissible under the law, and will exercise its oversight authority to the fullest extent as appropriate.
FCMs have strict duties and obligations pursuant to the CFTC's customer protection rules and are held to the highest standards to safeguard the public.”
Crypto.com Disregards CFTC Request, Continues to Offering Super Bowl Betting
Crypto.com got the same request from the CFTC last month. But they decided that they would continue to offer these contracts. Crypto.com is waiting on the Trump administration to decide on this new form of online betting. In a statement to Sportico, Crypto.com said:
“We firmly believe in the legality of our events contracts and want to continue to provide our customers with new and innovative product offerings.”
Kalshi, another financial prediction company, is also offering these services to their users. They’re mired in their own battle with the CFTC based on the election markets they offered. Kalshi facilitated over $200 million in market trades on the election in November.
What Does this Mean for Online Sports Betting?
This could be a gigantic shift in online sports betting. These companies got their start in predicting financial futures, but they’re now trying to use that same system for sports betting. That means they’ll be competing with sportsbooks in the United States, which battled for years for regulation.
Crypto.com is busy in the sports sector, as they sponsor the arena for the Los Angeles Lakers. Its logo can also be seen on jerseys, as well as Formula 1, the Champions League, and the UFC. This could help in their bid to get regulated.
This is lining up to be a lengthy legal battle between these companies and the CFTC, which has a new chair in Caroline Pham, who was appointed to the role by President Trump. In another statement, Pham claimed:
“Prediction markets are an important new frontier in harnessing the power of markets to assess sentiment to determine probabilities that can bring truth to the Information Age. The CFTC must break with its past hostility to innovation and take a forward-looking approach to the possibilities of the future.”
This isn’t the last we’ve heard of this situation, and we’ll keep you updated on all the latest details.
