The withdrawal by ErisX on March 22, 2021, of its submission to the Commodity Futures Trading Commission (”CFTC” or “Commission”) to list cash-settled futures contracts on National Football League games (”NFL contracts”) will not be the last word on the subject of derivatives contracts on sports events, much less on prediction contracts more generally.
To the contrary, the statements issued by CFTC Commissioners Brian Quintenz and Dan Berkovitz in connection with ErisX’s unsuccessful submission portend more administrative and legal developments with respect to event contracts. ErisX may file an amended submission, or another designated contract market (”DCM”) may seek to list a contract that some, including the CFTC’s staff, could claim to be “gaming” or another form of event contract.
In that likely event, the CFTC will need to grapple with myriad questions arising from the Commodity Exchange Act (”CEA”) provision governing event contracts, a CFTC regulation implementing that provision, and derivatives market structure issues more broadly.
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