For the quarter century-plus from 1992 until May 2018, the four prominent US-based pro sports leagues plus the NCAA acted as the legal bulwark against the expansion of legal sports betting outside Nevada.
Things changed when the Supreme Court announced its decision in Murphy v NCAA in 2018. That decision opened the floodgates for the legalisation of sports wagering nationwide. Senators and congressmen across the country heeded the call and the leagues, well, they played ball. This began with Major League Baseball and the National Basketball Association announcing a first wave of authorised gaming operators, which are effectively licensing and sponsorship agreements with certain sportsbooks.
Things may soon go much further.
In the wake of the latest mutation within the DNA of US sports betting – the apparent legality of Commodities Futures Trading Commission (CFTC)-regulated sports events contracts offered on platforms like Crypto.com and now Kalshi – it is possible that sports pro leagues themselves will operate platforms where sports contracts, or bets, are exchanged.
“If CFTC-regulated sports exchanges become a reality, the sports leagues themselves will swiftly move to operate such exchanges,” predicts Ryan Rodenberg, a professor at Florida State University who has followed the Kalshi-CFTC litigation closely. “By doing so, the leagues will be direct competitors in the space and will try to put certain sports betting operators out of business.”
A new era indeed
Before going further, here is a quick synopsis of the current landscape around financial exchanges and prediction markets: Back in the fall of 2024, Kalshi won a hard-fought battle against the CFTC, arguing that the agency had no authority to prohibit trading on political markets/events such as who would win the US presidential election. A district court sided with Kalshi, ruling that the events did not “involve” either gaming or unlawful activity and so Kalshi proceeded to offer political markets. The CFTC appealed to the DC Circuit with oral argument held on 17 January.
While this has played out, Crypto.com and more recently Kalshi have pushed the envelope, allowing trading on a variety of sporting events such as the NFL conference championships, the Super Bowl, the NBA title and who will be the next head coach of the New Orleans Saints, for example. In addition, the new Trump administration has installed Caroline Pham as the new CFTC interim chief, replacing Rostin Behnam who resigned on 7 January after seven years at the agency.
Rodenberg said the CFTC now has three options with respect to sports trades.
Read the full story here.
Casino Reports is an independently-owned publication dedicated to covering the regulated US online
casino/igaming industry, with news, features and original reporting on industry happenings, business, legislation, regulations and more.
