In a letter sent to companies that are registered with the Commodity Futures Trading Commission (CFTC) and offer NFL trades, the league said “objectionable bets” include event contracts that could easily be manipulated by a single person, that are inherently objectionable, that relate to officiating or that are knowable in advance, according to the report.
Those that are “inherently objectionable” have to do with injuries, fan safety or misconduct, per the report.
NFL Executive Vice President Jeff Miller told CNBC: “Sports prediction markets are not effectively regulated currently. We will continue to engage with the CFTC in pursuit of the necessary guardrails to protect both the integrity of the game and consumers participating in these rapidly evolving markets.”
PYMNTS reported in February that the NFL upheld its ban on prediction market operators purchasing Super Bowl television ads.
The CFTC has made the case that the authority to oversee prediction market operators lies with it. The regulator filed an amicus brief in federal court defending its right to enforce prediction markets rather than individual states.
The regulator reiterated that in a Feb. 25 press release, saying that it has full authority to police illegal trading practices on designated contract markets.
CFTC Chairman Michael S. Selig said the same day that exchanges are the regulator’s first line of defense against insider trading in prediction markets and that actions announced by prediction market operator Kalshi should serve as a warning against that kind of misconduct.
Kalshi outlined two inside trading cases that it recently closed. In both cases, the company’s systems flagged the trades, and its surveillance team froze the traders’ accounts.
On March 12, the CFTC said that it is seeking public comment on whether it should amend or issue new regulations regarding event contracts traded on prediction markets.
The regulator also reminded designated contract markets of their obligations under current regulations.
Selig said in a March 12 press release that the regulator aims to “promote responsible innovation in our derivatives markets.”
