ErisX, a cryptocurrency derivatives platform, made a proposal to Commodity Futures Trading Commission (CFTC) requesting it to pass three Sport Betting Futures meant to serve as “risk hedging” tools. If the request gets CFTC approval, it will mean that the three proposed contract futures would be tied to National Football League (NFL) game results.
ErisX Exchange had made the official request to CFTC to give the go-ahead to its betting-connected futures. The ErisX betting proposal to CFTC was made in mid-December last year as per the Bloomberg report published on February 2, 2021.
What does the contract’s proposal entail?
The platform needs CFTC to approve three types of contracts on the NFL. The first feature is based on the game-winner, second on points variation attained by a specific team, with the last being the total points accrued from a game.
As no betting standard laws are cutting across U.S. states on sports gambling, bookies encounter variations in the number of wagers attracted by teams. With this, there is a possibility of creating an inequity that would result in gambling companies paying out more to gamblers than they receive.
Basing on this reality, ErisX Exchange came up with the proposal of Financial instruments being used as risk management tools. According to ErisX’s CEO, Thomas Chippas, they aim to cushion bookies against the economic crisis. The CEO in Bloomberg’s report insisted that this is not a replacement for betting.
If this proposal passes, trading of the NFL futures contracts would be made available to bookies, sellers, and firms that agree to be market makers and price setters. Unfortunately, private investors and hedge funds will be locked out.
CTFC has set a timeline of 90 days to seek the public’s opinion regarding the ErisX proposal. This implies, the commission will be able to give feedback around mid-march. If the commission approves, professional basketball and baseball will be the next area of interest.
In this project, ErisX has joined efforts with an experienced criminal defense lawyer in gaming law, Jeff Ifrah. Delta Strategy Group, a lobbying company, is also backing the platform’s efforts, and together they have been involved in negotiations with CTFC’s officials for a couple of months now.
In 2010, U.S laws banned fiscal instruments linked to betting. Therefore, the commission is looking to establish whether the contracts are consistent with the public interest and the U.S gaming conventional laws.
However, the executive director of the national group Stop Predatory Gambling, Les Bernal has warned over the ErisX proposal to CTFC, terming it as biased and meant only to favor the betting companies while tricking citizens into losing money continuously.