For decades, sports betting enthusiasts have pointed out that wagering on the outcome of a sporting event is nearly identical to making a short-term investment in the stock market. That dictum is getting put to the test in recent days as Crypto.com, a Singapore-based cryptocurrency exchange, enters the sports event trading market.
Trading in sports events differs from traditional sports betting in several ways but differs the most in that it offers players/investors a chance to make a yes/no prediction on the outcome of the event. The various outcomes are presented at different price points that are similar (but also very different) from point spreads. It’s a regulated activity that gained traction in the United States during the recent presidential election (which was the first US election whose outcome could be legally wagered on by Americans).
In its current form, sports event trading is nearly identical to standard derivatives trading and is regulated by the Commodity Futures Trading Commission (CFTC). Whether or not it remains under the CFTC’s jurisdiction will likely depend on how the traditional gaming industry reacts to this new twist. If it turns out to be popular, sports event trading will likely come under fire by gaming industry lobbyists.
Kris Marszalek, co-founder and CEO of Crypto.com touted his new product in a recent press release saying, “Sports event trading offers an entirely new platform for U.S. users to engage nationwide at Crypto.com and in the Crypto.com app. This unique financial product allows users to trade their prediction on the outcome of a sports event. It’s a fundamentally new concept for sports, and we’re thrilled to be the first regulated platform in the U.S. to offer it to our users.”
Crypto.com’s first sports trading event is based on the 19 teams that will compete in the NFL playoffs and which of them will got to and win the Super Bowl.