New Market Similar to Election Betting
The new Super Bowl trading market was inspired by the success of Crypto.com’s election prediction market. This allowed users to back a candidate by buying “contracts” for them to win or lose. The offering was very popular, thanks in part to many markets not allowing sportsbooks to offer odds on US elections.
While the election prediction market was popular, it has drawn pushback from lawmakers. Congress is currently considering a bill that would ban all election betting, including prediction markets.
Loophole Keeps Market Outside of Sports Betting Industry
Crypto.com has been able to launch its new Super Bowl market because users aren’t betting against the house. Instead, they are playing the market, qualifying it as trading instead of gambling. This allows them to operate across the US without the taxes and regulations of the sports betting industry.
Many daily fantasy sites have used a similar loophole to offer a form of sports betting but have begun to face pushback. Lawmakers have been looking to close those loopholes to curb problem gambling and protect the tax revenue the industry generates.
DFS operators have been central to this effort, but Crypto.com, with its Super Bowl market now live, could soon join them.
Inflection Point Coming for the Sports Betting Industry
Crypto.com’s platform represents a fork in the round for the US sports betting industry. If lawmakers cannot clamp down on the new market, you can expect the company and its rival to quickly add more sports event markets.
The expansion of sports trading markets can potentially deal a serious blow to the seemingly infallible sports betting industry. Not only are they not subject to the high tax rates, but sportsbooks do not currently accept crypto. That has been a hot topic in the industry, and it could lead to more people opting to use trading markets instead of visiting their favorite sportsbooks.
Whatever federal and state lawmakers decide, it will further cement what is considered to be gambling in the US.