February 3, 2025 3 min read

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Professor Suggests Sports Leagues May Soon Control Betting Exchanges

Sports leagues across the United States may considering operating betting exchanges in a move that is expected to change the betting and event trading verticals

For nearly three decades until 2018, sports betting was restricted to a handful of jurisdictions across the United States. However, since the US Supreme Court struck down PASPA, the expansion of legal wagering started.

Now, nearly seven years since the landmark decision, legal betting is available in close to 40 states. But it’s not only betting and gaming operators interested in the sector, considering the recent entry into the vertical by exchanges such as Crypto.com and Kalshi.

Leagues May Consider Entering the Sports Trading Vertical

Each of the two platforms recently announced its entry into the sports betting sector by introducing prediction markets on popular sports events. Late last month, Kalshi ventured into sports event trading after announcing contracts on the outcome of the Super Bowl, as well as other important sports events.

Similarly, earlier in January, Crypto.com confirmed the launch of National Football League (NFL) prediction markets, in another move that expanded the cryptocurrency exchange’s offering. Crypto.com’s announcement followed the introduction of “sports events contracts,” which the platform announced late in December.

In light of the entry of the two platforms into sports trading, an expert predicted that if exchanges are regulated by the Commodity Futures Trading Commission (CFTC), sports leagues across the country may also consider entering this vertical. That’s the opinion of the Florida State University’s professor, Ryan Rodenberg, who was recently quoted by Casino Reports.

If CFTC-regulated sports exchanges become a reality, the sports leagues themselves will swiftly move to operate such exchanges,” he predicted. In addition, Rodenberg pointed out: “By doing so, the leagues will be direct competitors in the space and will try to put certain sports betting operators out of business.”

Running a Betting Exchange Would Enable Leagues to Benefit from Commissions

Currently, the NFL, National Basketball Association and Major League Baseball, among other leagues, benefit from sponsorships with betting companies. In addition, the leagues profit from selling data, which is vital for bookmakers and especially when it comes to in-play prop bets.

However, sports leagues may increase their profits through commissions, if they consider offering betting exchange services. According to Rodenberg: “Running a betting exchange is an entry point for sports leagues who can charge commissions on every transaction, while not having a pecuniary position in the underlying outcomes like a traditional sportsbook where bets are made against the house.”

Previously, Kalshi and the CFTC clashed over the former’s offering of event contracts on political events. After a prolonged battle, the exchange platform prevailed in the legal argument, enabling it to offer event contracts on the US presidential election. Still, the dispute isn’t quite over as the CFTC filed an appeal with the DC Circuit.

However, the federal agency may ultimately consider a less strict approach toward event trading contracts and cryptocurrency, considering the elections were won by Donald Trump. The newly appointed administration by the president resulted in changes in key figures, including the appointment of a new CFTC boss, Caroline Pham. In that line of thought, if sports leagues make a swift move toward sports trading, such a pitch may ultimately prove to be successful.

Journalist

Jerome brings a wealth of journalistic experience within the iGaming sector. His interest in the industry began after graduating from college, where he regularly participated in local poker tournaments. This exposure led him to the growing popularity of online poker and casino rooms. Jerome now channels all the knowledge he's accrued to fuel his passion for journalism, providing our team with the latest scoops online.

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