Caroline Pham, Acting Chairperson Commodity Futures Trading Commission Page 6 of 13
reservation under its IGRA compact) (accessible here); Tribal / State Compact between the Mississippi Band of Choctaw Indians and the State of Mississippi, § 4.21 (Jan. 29, 1993) (“‘Sports pool’ means the business of accepting wagers on sporting events by any system or method of wagering other than the system known as the pari-mutuel method of wagering; provided, however, that such wagers shall be allowable under this Compact only if such wagers are allowed on non-Tribal lands under the laws of the State.”) (accessible here). 4 While neither IGRA nor its implementing regulations expressly define “sports betting,” the term is generally understood to mean “staking or risking . . . something of value upon the outcome of . . . a sporting event . . . upon an agreement or understanding that the person or another person will receive something of value in the event of a certain outcome.” 31 U.S.C. § 5362(1)(A) (definition of “bet or wager” under the Unlawful Internet Gambling Enforcement Act). In turn, the term “sporting event” may entail a variety of factors surrounding sports competitions. For example, New Jersey defines “sports event” to mean not only the sport game itself, but “any portion thereof.” N.J. Stat. § 5:12A-10; see also id. (defining “sports book” as “the business of accepting wagers on any sports event by any system or method of wagering, including but not limited to single-game bets, teaser bets, parlays, over-under, moneyline, pools, exchange wagering, in-game wagering, in-play bets, proposition bets, and straight bets.”). Here, that is precisely what Sports Contracts purport to do. An event contract is one that is for an allowable commodity “based upon the occurrence, extent of an occurrence, or contingency [of an event] . . . by a designated contract market or swap execution facility . . . .” 7 U.S.C. § 7a-2(c)(5)(C)(i). As such, a sports event contract is one that is based upon the occurrence or outcome of a sporting event, or any part thereof—meaning, Sports Contracts are contracts with a value dependent upon the outcome of certain sporting events, i.e. , sports betting. Regardless of whether Sports Contracts constitute Class III gaming under IGRA—which they do—they are expressly prohibited by both the CEA and the CFTC’s implementing regulations because they “involve . . . gaming.” 5 4 See also 13 Miss. Admin. Code Pt. 9, R. 2.1(b) (permitting sports betting within the State of Mississippi (citing Miss. Code Ann. §§ 75-76-89 and 75-76-63)) (accessible here). 5 The CFTC’s adoption of regulation 17 C.F.R. § 40.11(a)(1) prohibiting event contracts that “involve . . . gaming” constituted a Final Determination that those contracts are contrary to the public interest under 7 U.S.C. § 7a-2(c)(5)(C)(i). See 7 U.S.C. § 7a- 2(c)(5)(C)(ii) (“No agreement, contract, or transaction determined by the [CFTC] to be contrary to the public interest under clause (i) may be listed or made available for clearing or trading through a registered entity.”). While such contracts clearly are contrary to the public interest, if an event contract “involves . . . gaming[,]” that contract is categorically prohibited and no further public interest determination by the CFTC is
Made with FlippingBook - Online catalogs