Chavdar Vasilev is a journalist covering the casino and sports betting market sectors for CasinoBeats. He joined CasinoBeats in May 2025 and reports on industry-shaping stories across the US and beyond, including legislative debates, market...
Read Full BioCaroline Pham, the acting chair of the Commodity Futures Trading Commission (CFTC), has responded to Sen. Catherine Cortez Masto (D-Nev.) regarding Masto and a group of U.S. senators’ questions on sports event contracts.
The letter, portions of which The Closing Line newsletter shared, outlines how Designated Contract Markets (DCMs) list products, how the agency oversees market integrity, and where its jurisdiction ends.
Self-Certification Dominates: 2,393 Products Since 2022
One question focused on the number of contracts related to what has historically been referred to as “sports gaming activities” and the guidance the CFTC provides to firms seeking approval.
CFTC noted that the Product Review Program reviews all submissions and emphasized the self-certification framework. A DCM, it wrote, “must do so according to the process set forth in CFTC regulation § 40.2.”
That includes filing at least one business day before listing. Additionally, providing the full contract rules, a compliance certification, and “a concise explanation and analysis that is complete with respect to the product’s terms and conditions, the underlying commodity, and the product’s compliance with applicable provisions of the Act.”
The CFTC revealed the scale of listings: “2,393 DCM products (for all types of contracts) were certified between 2022 and 2024.” Only one product required full Commission approval. So far this year, “1,913 additional contracts” have been self-certified.
The agency revealed that, regarding event contracts, 1,653 DCM products were certified from November 15, 2024, through November 15, 2025. It noted that one filing can cover multiple individual contracts.
The CFTC also stressed its limited ability to halt a product once self-certified, quoting § 40.2(c): the Commission may only stay a listing “during the pendency of Commission proceedings for filing a false certification or during the pendency of a petition to alter or amend the contract terms and conditions pursuant to Section 8a(7) of the Act.”
Oversight of Manipulation: Core Principles & RER Exams
Senators also asked how the CFTC ensures that athletes, referees, or team employees do not manipulate outcomes.
The Commission highlighted the statutory 23 Core Principles that all DCMs must adhere to. The Division of Market Oversight (DMO) evaluates compliance with integrity-related requirements. Those include Core Principles 2, 4, 12, and 13. DMO uses three tools:
- Rule Enforcement Reviews (RERs): DMO exams for compliance on “trade practice surveillance, market surveillance, real-time market monitoring, or disciplinary programs.” After on-site interviews, DMO prepares “a detailed report of findings and recommendations.” The DCM must submit documentation showing “that each corrective action has been fully addressed.”
- CFTC Regulation § 38.5(b): DMO can require a DCM to file a written demonstration “containing supporting data and documents” proving compliance.
- Quarterly update calls: Ongoing monitoring of DCM self-regulatory systems.
The CFTC’s answers reiterate that DCMs—not the agency—serve as frontline self-regulators responsible for market surveillance and enforcement.
No Role Under the Federal Wire Act
The senators inquired about how the agency ensures compliance with federal laws prevalent in sportsbook markets. These include the Wire Act, geolocation, Know Your Customer (KYC), and Anti-Money Laundering (AML) standards.
CFTC responded plainly: “The CFTC does not have enforcement authority under the Federal Wire Act.”
No Direct View on Whether Sports Betting is Entertainment or Investment
Asked whether sports betting is an entertainment activity or a financial investment product, the CFTC offered no classification.
Instead, it wrote: “The Commission is aware of various forms of State regulatory actions, and pending and potential litigation concerning the legality of sports-related event contracts listed on DCMs.”
The answer reflects the ongoing debate surrounding the CFTC’s proposed rule, which must determine whether sports outcomes fall under “gaming” activities prohibited by the Commodity Exchange Act.
A Clearer Signal: Courts, Not the CFTC, May Decide the Future
The combination of the Commission’s carefully limited responses and recent comments from Chair nominee Michael Selig suggests the agency is positioning itself to let Congress and the courts—not the CFTC—make the decisive call on sports-related event contracts.
Selig has already said these questions should be resolved “by Congress or the courts.” Former Chair nominee Brian Quintenz had also echoed that view.
That stance carries weight as authorities and native American tribes are contesting the legality of prediction markets in several states. Litigations are ongoing in California (tribal case), Wisconsin (tribal case), Nevada, Maryland, New Jersey, Massachusetts, Ohio, and New York.
Some industry observers predict that the dispute may ultimately reach the U.S. Supreme Court, which could be years away. That means these markets will likely continue to expand under effectively unregulated oversight.
