Key Takeaways
- Sports betting is legal in 38 states, and Crypto.com operates in all 50.
- Polymarket is under pressure from the Biden administration to provide customer details.
- The CFTC’s Chairman, Rostin Behnam, will officially step down on Jan. 20. Donald Trump has yet to name a successor.
The U.S. Commodity Futures Trading Commission (CFTC) may be opening up an investigation into cryptocurrency exchange Crypto.com for allegedly violating U.S. laws by allowing users to bet on the outcomes of major football games such as the Super Bowl.
Illegal Formation
As Bloomberg reports, the CFTC is examining whether Crypto.com’s Super Bowl and American football event contracts violated gaming laws.
Gambling laws are complicated in the U.S. Sports betting has been banned or prohibited in most states under federal law for many years. Since 2018, however, the states have been allowed to regulate the activity themselves.
Some have opted to legitimize sports betting wholesale, while others may still restrict sports gambling to specific locations or other limitations. Regardless, 38 states, including the District of Columbia, have legalized sports betting to some degree; 30 of those states allow online and mobile sports betting.
In August, the agency proposed banning certain event contracts, namely those in sports and politics.
Crypto.com’s contracts, which allow the platform’s investors to wager on outcomes of college and National Football League matches, are purposefully ambiguous in not mentioning the games by their formal names on promotional or social media materials, though they can be seen on the platform’s app.
The problem is that Crypto.com is available in all 50 states and isn’t managed state-by-state. Crypto.com’s introduction of a “self-certified” contract may violate gaming law. Ironically, this comes after a legal ruling effectively greenlit events contracts.
Roughing the Passer
The news follows the CFTC’s ongoing efforts to reign in crypto betting platforms such as Polymarket. The CFTC launched criminal and civil investigations into the platform during and following the 2024 U.S. Presidential race.
Notably, the CFTC alleges Polymarket violated a 2022 settlement in which it agreed to cease all services for U.S. customers and pay a $1.4 million fine for operating without registering with the CFTC.
Perhaps most contentious is how the CFTC has proposed to define “gaming” under its rules.
However, the CFTC’s use of the word “gaming” as a broad and ambiguous definition received significant pushback from notable industry players. This rule was never finalized.
Eddie is a gaming and crypto writer at CCN. Covering the often weird and wonderful world of Web3 with an adoring, but skeptical eye.
Prior to CCN, Eddie has spent the past seven years working his way through the crypto, finance, and technology industry. He began with PR and journalism with Bitcoin PR Buzz and BitcoinNews.com, eventually working his way to become a copywriter with a dozen firms, including the likes of Polkadot before returning to journalism in 2023.
Having studied Radio production and journalism at University in the UK, Eddie spent a few years making podcasts and presenting on a local London radio station as he built up his writing chops.
A lifelong skateboarder, Eddie can often be found at the skatepark or touring the streets looking for something new to try. That, or kicking back playing JRPGs on his original PSP.
