CFTC May Block Crypto.com and Kalshi Super Bowl Trading Contracts

They're not part of our best sports betting sites, but Crypto.com and Kalshi both see plenty of action in their own rights.

The Commodity Futures Trading Commission (CFTC) has sought more input from Crypto.com and Kalshi about the newly offered Super Bowl LIX trading contracts to determine whether the deals meet the set rules. This scrutiny is part of the regulator's January 2025 move to place Crypto.com's sports contracts under a special regulatory review.

According to its oversight regulations, the CFTC may ask self-certifying companies for further product information. This would include confirmation that the contracts are within regulatory bounds or that no market manipulation occurs.

In January, the CFTC voted to review Crypto.com's contracts to determine whether they are considered gaming and subject to different regulations. The Commission will vote on banning the contracts in April 2025, so these markets will remain live until then.

Separately, event-based trading platform Kalshi also announced Super Bowl-themed contracts under a newly inked partnership with the trading app Robinhood.

The Kalshi contracts have not received the same heightened scrutiny from the CFTC as those proposed by Crypto.com. However, Robinhood has suspended its professional football championship market.

The CFTC asked the company to limit customer access through Robinhood to its sporting contracts, like the Super Bowl. The firm and the regulator are working together to develop and eliminate CFTC concerns.

Before getting action down with Kalshi's trading contracts, sign up with a Kalshi promo code.

Tap into Super Bowl success

The American Gaming Association has forecasted an estimated $1.39 billion will be wagered through legal sportsbooks on the 2025 Super Bowl as bettors take advantage of sportsbook promos.  

Late in 2024, ready to capitalize on the growth in sports betting, Crypto.com added sports event contracts, a type of derivative that bettors could use to bet on yes-or-no propositions. These are no different from other traditional derivatives, where people speculate on sports events. 

Contracts function like options, offering pre-set payouts contingent on whether an event does or doesn't occur. These might include a contract that grants a trader the right to bet on whether a particular team will win the Super Bowl. If the wager proves correct, the trader gets paid. If the wager proves wrong, the trader loses their stake. 

Event-based contracts have concerned regulators because they are similar in activity to traditional sports betting, which falls under different legal and regulatory frameworks than financial trading. Crypto.com launched event contracts without warning the CFTC. After the launch, the Commission started deliberations, resulting in a special review of the contracts. 

It's no secret that regulators are explicitly concerned with whether such contracts fall under commodities trading or should be regulated as gambling products. However, the CFTC cannot answer that question alone, meaning the debate could receive much greater attention.