Last week it was revealed that the Commodity Futures Trading Commission (CFTC) is probing Crypto.com’s contracts related to the Super Bowl and other sports events to assess their legality.

This follows similar investigations into the offering of election event contracts by Kalshi and Robinhood. Following an initial win in the appeal court case against the CFTC the two companies combined for over $300m in contracts related to the 2024 election.

Speaking on the latest episode of iGaming Daily, Jessica Welman, Editor of SBC Americas, explained that events contracts have evolved from taking a position on the success of harvests 150 years ago to now geopolitical events such as the Brexit referendum.

On the latest Crypto.com probe, she said: “What makes it different is that the Kalshi and Robinhood ones are event contracts with US dollars and the Crypto.com contracts are contracts funded through cryptocurrencies. 

“The issue here is less that it’s a sports contract and more that it’s a sports contract funded through a cryptocurrency and we’re getting into the subcontracting of things. That is where the CFTC has concerns.”

On the whole, sports betting in the US is governed at a state level meaning that it is somewhat insulated from any potential changes caused by the incoming Trump administration.

However, Jess noted, that this latest probe by the CFTC is an issue that Donald Trump may choose to weigh in on given his vocal stance on cryptocurrency. 

“[Trump] has spoken about how he wants the United States to be more embracing of cryptocurrencies under his administration,” she explained.

“I think the CFTC could have a very rapid shift in its stance on these sorts of things. So this Cyrpto.com inquiry that is just getting started might not go anywhere because the person in charge is leaving. 

“The mechanisms have already been triggered and nothing is going to stop them, but there are several things on the Crypto.com and Kalshi front that depending on how things go, the regulatory body can very easily say, we don’t care about this anymore.”

She concluded by saying that the issue of events contracts, especially around sports events, raises a rare conflict between federal and state regulation over who controls these issues and further highlights the question of when investing stops and gambling starts.