The National Football League (NFL) wants the commodities regulator to force prediction market providers to block contracts on events that are “easily manipulable” by a single person. Examples include first pass and field goal completion.
The league has written to the Commodities and Futures Trading Commission (CFTC) Chairman Michael Selig to request the changes, CNBC reported.
The letter, penned by Brendon Plack, the NFL’s head of government affairs and public policy, also calls for the regulator to raise the age limit for NFL betting from 18 to 21 and ban margin trading.
NFL’s Regulator Requests
Sports event contracts that are “not fully collateralized” risk “amplifying addictive behavior and loss risk,” said Plack.
The league wants the CFTC to force providers to ban contracts on events that are “knowable in advance.”
Examples of the latter include the nature of the first play of the game.
Plack also asked Selig to ban “inherently objectionable” contracts on events such as injuries.
The NFL also raised several potential concerns regarding match-fixing and insider trading. The league wants the regulator to create a special certification process for individual player performance-related prediction contracts.
Sticking Points
The NFL wants prediction markets to adhere to many of the conventions, rules, and guidelines used by the traditional sports betting industry.
This may well pique Selig’s ire. The CFTC chairman has repeatedly said prediction market platforms and sportsbook operators are “two separate things.”
“What you’re seeing is markets versus entertainment […] They are different models. The conventional sportsbooks and casinos are entertainment,” Selig told Axios earlier this month.
Selig said the regulator will regulate prediction markets “as financial markets, not as entertainment.”
Throughout the letter, Plack reportedly made several references to state-level gambling regulations.
The mention of states may prove to be a sore point for the CFTC. The regulator is still fighting legal battles against states that have attempted to take matters of prediction market regulation into their own hands.
While the state-related issue may ruffle feathers, the NFL and Selig may be on more comfortable ground regarding insider trading.
Earlier this month, the CFTC said it was speaking to “all the professional sports leagues” about ways to prevent insider trading.
In his letter, Plack reportedly recommended that the National Futures Association, the US derivatives regulator, strike data-sharing agreements with state gaming regulatory authorities.
This, said the NFL executive, could help bolster enforcement mechanisms to block certain individuals from participating in prediction markets.
These individuals should include NFL league employees, Plack explained.
The regulator this month sealed a memorandum of understanding deal with MLB, as officials look for ways to flag suspicious trading activity on prediction market platforms.
