The U.S. derivatives market regulator Commodity Futures Trading Commission (CFTC) has announced that it has initiated a review of RSBIX NFL futures contracts self-certified by Eris Exchange, LLC (ErisX).
ErisX self-certified three RSBIX NFL futures contracts: one based on the moneyline; the second on the point spread; and the third on total points for individual NFL games. Beginning today, the CFTC has 90 days (or longer as agreed to or requested by ErisX) to review and make a determination with respect to the submissions.
The review follows a CFTC determination that the RSBIX NFL futures contracts “may involve, relate to, or reference” an activity including but not limited to “gaming, or an activity that is unlawful under any State or Federal law.” Accordingly, the Commission has requested that ErisX refrain from listing and trading its proposed RSBIX NFL futures contracts during the pendency of the review period.
The Commission said that it will also open a 30-day public comment period on specific questions related to the RSBIX NFL futures contracts to help inform its review. The public comment period opens on December 28, 2020 and closes on January 28, 2021.
The RSBIX / ErisX sporting event based futures contracts were designed to specifically meet the hedging needs of commercial market participants, as sports betting increases in popularity and legality across the US. The plan is for trading to be accessible only to eligible contract participants such as state-licensed sportsbooks, vendors and stadium owners – i.e. entities with a demonstrated need to hedge financial exposure associated with their commercial business, as well as designated market makers. ErisX had hoped to launch contracts for the remainder of the current NFL season, and then move into the full upcoming NBA season which kicked off this week.
The original ErisX submission to the CFTC for the NFL futures contracts can be seen here (pdf).