Underdog launches NFL drive markets amid scrutiny of micro contracts
The launch follows a CFTC pause on Novig micro contracts over manipulation concerns. The agency did not immediately respond to questions about Underdog’s markets.
Key points
- Underdog began offering prediction markets on individual NFL drives.
- The CFTC previously told Novig not to list basketball micro contracts it considered susceptible to manipulation.
- New Jersey, Pennsylvania, New York and Ohio lawmakers have proposed restrictions on micro bets or live betting.
- Rep. Ro Khanna called for Congress to ban sports prediction markets.
Underdog has begun offering prediction markets on individual NFL drives in the United States, as federal regulators scrutinize short-duration contracts and state lawmakers consider restrictions on similar sportsbook wagers.
Legal Sports Report reported that Underdog director of product Harry Raymond shared recordings of the markets during Monday Night Football between the Bills and Vikings. The contracts include the result of the next drive and which player will catch a pass during it.
The launch comes weeks after the Commodity Futures Trading Commission paused micro contracts from Novig over manipulation concerns. The agency told Novig that contracts on the first points scored in a basketball game were susceptible to manipulation and should not be listed.
The CFTC did not immediately respond when Legal Sports Report asked whether it considers Underdog’s markets micro contracts and whether it would ask the exchange listing them to pause or remove them.
Micro bets focus on short sequences within a game. At sportsbooks, examples include wagers on the result of the next football drive or whether the next baseball pitch will be a ball or strike.
In New Jersey, a bill to eliminate micro wagers advanced out of committee in March but has not moved since. Pennsylvania lawmakers have introduced bills to ban micro bets and limit same game parlays on props, while proposals in New York and Ohio would ban live betting.
Prediction markets do not face the same consumer protection requirements as state-regulated sportsbooks, according to Legal Sports Report. Most states require sports bettors to be 21, while prediction markets generally allow users as young as 18. Some prediction markets have voluntarily added tools similar to sportsbook deposit limits, cooldown periods and self-exclusion.
Rep. Ro Khanna (D-CA) called on Congress on Tuesday to ban sports prediction markets, arguing that they evade state consumer safeguards and fuel addiction. A separate bill introduced in March by Sen. John Curtis (R-Utah), with Sen. Adam Schiff (D-Calif.) as a cosponsor, would ban operators from offering sports event contracts.
Sources
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