The rule should ask whether a venue’s integrity capability functions, not whether it can produce a document describing one.
On 28 August a Ninth Circuit panel, reviewing the dissolution of a preliminary injunction, took the view that Rule 40.11 as it currently stands bars gaming-related contracts from being listed on a designated contract market, and that the exchange before it was unlikely to succeed in defending its self-certification and listing of sports event contracts under the Special Rule and that regulation. The court addressed the Commission’s proposed replacement rule directly: proposed regulations have no legal effect, and until 40.11(a) is amended in the manner described in the Notice, it bars those contracts from being listed.
This is a preliminary-injunction appeal decided on likelihood of success rather than a final merits ruling, and the panel remanded. It also conflicts with the Third Circuit’s April decision, which read the same statutory definition of a swap the opposite way and reached the opposite conclusion on whether the Commodity Exchange Act pre-empts state gaming law. New Jersey’s petition deadline in that case falls on 3 September. None of it is settled.
What it does change is the weight now resting on the rulemaking. For as long as that decision governs within the Ninth Circuit, the final rule is no longer one input among several in a public interest assessment. It is close to determinative of whether these contracts may be listed at all. Judge Lee, concurring, went further, observing that the Special Rule appears to give the Commission discretion whether to ban gaming contracts altogether, and that the question need not be answered now only because 40.11 currently bars them.
Which makes what the rule actually requires a considerably more urgent question than it was in July.
Seven filings came in from the sports side before the comment file closed on 27 July, one of them joint across five player associations. They were submitted separately, by organisations with distinct commercial positions and separate counsel, several of which compete with each other and two of which hold partnerships with the venues they were writing about. They arrived at very nearly the same list.
Major League Soccer asked the Commission to require venues to maintain internal market monitoring and engage independent third-party integrity monitoring, to notify the Commission and the governing body of activity indicating an integrity concern, to cooperate with investigations, to prohibit participation by players, coaches, referees and team or league personnel, to settle on official league data, and to maintain controls against insider trading.
The NBA said the proposal’s inclusion of information-sharing provisions falls well short of categorically requiring venues to comply with basic sports integrity protections, and named three: cooperating with league investigations, notifying a league of suspicious trading or of prohibited trading by league personnel, and consulting on new player proposition markets. It asked separately for venues to affirmatively block athletes, officials and team personnel using league-provided lists, and to ensure that contracted futures commission merchants implement the same blocks on their own customers. It asked that robust know-your-customer systems be required without exception, noting that venues which may not use traditional identity processes pose severe challenges to any ability to detect prohibited trading, and that functionally anonymous trading of sports contracts should not be possible.
The ATP Tour asked that cooperation with investigations be expressly required rather than encouraged, that settlement on official league data be mandatory rather than a weighing factor, and that leagues have a formal role in certification. It also observed that the proposal imposes no affirmative surveillance obligations tailored to sports event contracts, and establishes no requirements for collecting trader information sufficient to determine whether a trader is affiliated with a league or an athlete.
The NCAA asked for required coordination covering input on proposed contract types, an escalation route for concerns arising after listing, expeditious reporting of suspicious trading, uniform categories of prohibited traders, cooperation in investigations including transaction and customer-level data, and, separately, that suspicious trading identified by one exchange be shared with other exchanges listing the same or similar contracts.
Major League Baseball made a point about scope that nobody else made as clearly. Under the proposal the Commission may make public interest determinations about sports contracts only where settlement rests on what happens in an actual game. MLB noted that contracts on an athlete’s personal or legal affairs, on personnel decisions, on words spoken at a press conference, or on a celebrity’s attendance can raise manipulation, insider trading and league policy concerns while sitting outside that scope. Its position is that it cannot accept a venue declining to cooperate with a league investigation on the basis that a contract does not technically involve gaming.
The player associations asked for a transparent list of persons prohibited from participating, a process to petition for removal of problematic contracts, protection of athletes’ health, performance and biometric data from unauthorised use, and that where leagues share information about potential misconduct with the Commission or with venues, the affected athlete and their association receive the same information at the same time.
Read those together and a single object comes into focus. Reciprocal reporting between venues and sports bodies. Defined categories of persons who may not trade, screened at the point of trade and through intermediaries. Alerts that reach an investigative and disciplinary process. Trade-level data available under defined conditions. Suspicious patterns shared horizontally between competing venues. Consultation before new contract types list. Obligations that follow the contract rather than the definition.
That machine is not hypothetical. Variants of it have operated in regulated betting for roughly two decades, with materially different coverage, governance and effectiveness between jurisdictions.
What operating one teaches
Operator-funded alert networks have run across competing commercial entities in regulated betting since the mid-2000s, sharing suspicious activity between businesses otherwise trying to take each other’s customers, and passing confirmed concerns into the disciplinary machinery of sports governing bodies. Ontario’s Registrar’s Standards for Internet Gaming codify a version of it, requiring operators to identify unusual or suspicious betting activity and report it to an Independent Integrity Monitor, which distributes reports to its members and, where activity rises to the level of suspicious, notifies the appropriate governing authority for the sport.
I chaired one of those networks for three terms, from 2019 to 2025, having previously run trading across more than forty licensed jurisdictions. What follows is what that experience says about the asks now on the Commission’s file. Some of them work. Some of them will produce documents.
Mandating an arrangement produces arrangements. The NCAA, ATP and MLS all ask for coordination to be required. The instinct is right and the mechanism is weak. A requirement to have an information-sharing agreement is satisfied by having one. What determines whether anything flows through it is content: named authorised recipients on both sides, agreed alert thresholds, a standard format, escalation routes, and response timeframes appropriate to the contract. Sports contracts resolve quickly and a completed settlement is difficult to unwind, so for in-play or imminent events the timeframe is hours. Undefined cooperation produces alerts that arrive late, incomplete, or not at all. Every one of those failure modes occurs inside arrangements that exist on paper and satisfy their signatories.
Reporting has to run both ways, within limits. A venue assessing whether a contract is susceptible to manipulation using only its own trading data is working with materially incomplete information. Participant availability, disciplinary status, the existence of an investigation, officiating assignments and the competitive incentives of a given fixture all sit on the sport’s side. One-directional reporting reproduces the problem it was built to solve.
The player associations identified the constraint on this more precisely than anyone else on the file. Sports bodies operate under employment law, privacy, due process, contractual and investigative limits, and athletes have a legitimate interest in knowing what is said about them and when. The answer is proportionate flow, defined in advance, with a lawful basis, access controls and audit trails. Where venues and betting operators compete for the same customers it also needs competitive firewalls preventing commercial use of shared integrity data. Those protections have to be designed into the arrangement. They are never inherited from good intentions.
Screening is impossible without identity, and it has to reach the intermediaries. The NBA is right on both counts, and the second point is the one that gets missed. A block implemented at the venue while a futures commission merchant carries the same customer is not a block. ATP’s observation that no requirement exists to collect trader information sufficient to establish affiliation is the same problem stated upstream: a prohibited-persons regime with no identity layer beneath it is a list nobody can apply.
Detection and attribution are different jobs. MLS asks for internal monitoring plus independent third-party monitoring. That produces detection. It does not produce attribution. Automated systems identify anomalies; trading data alone will often not distinguish informed analysis from lawful but non-public knowledge from corrupt conduct. Somebody has to take an anomaly and pursue it to a conclusion, which requires analysts who understand the competitive context and have established channels into sport-side and regulatory counterparts. Detection is a system property. Attribution is an investigative one, and it is the part that gets cut when budgets are set.
Surveillance has to be calibrated to the sport. Market behaviour in sports contracts has expected patterns, conditioned by team news, liquidity and the state of play. Generic financial-market parameters do not transfer unmodified. A movement that is unremarkable in a liquid index product may warrant scrutiny in a thinly traded contract on a single fixture. ATP is right that the proposal imposes no surveillance obligations tailored to sports contracts. Tailoring is most of the work.
Horizontal sharing is where the value is, and it is achievable. The NCAA asked for suspicious trading identified by one exchange to be shared with other exchanges listing similar contracts. The NBA asked for the same in April. This is the ask I would defend hardest, because it addresses the participant nobody can see: the one distributing a position across venues, where no single venue holds a reportable pattern. Two decades of practice indicate that suitably governed sharing works without requiring participants to disclose commercial data. It also carries real confidentiality, competition and data-protection costs that need assessing rather than asserting.
Obligations should follow the contract, not the definition. MLB’s scope point is the sharpest thing on the file. An arrangement that switches off when a contract falls outside a definitional boundary is not an arrangement. If the purpose is to detect misuse of non-public information about a sport, the category of contract on which that information is monetised is a detail of the trade rather than a feature of the misconduct.
Why content matters more than review
The NFL supplied the figure that makes the capacity question unavoidable. The daily average of event contracts listed on one of the largest markets grew from approximately 1,600 in April 2025 to 162,000 in April 2026. More than 8,000 distinct event contracts were trading as of May 2026, across twenty-five designated contract markets. The NFL notes that the proposal contains no analysis of how many certified contracts the Commission could plausibly screen within its ten-day window, or of the staffing that would require.
That growth occurred under the regulation the Ninth Circuit panel read as prohibiting the contracts. The figure raises a practical question the proposal does not answer, which is whether post-listing review can remain a meaningful safeguard at that scale.
At that volume an effective review process would require a disclosed triage methodology, a staffing model and prioritisation criteria. The Notice does not appear to supply them. Which is why the weight has to sit on what a venue is capable of before anything is reviewed. The proposal’s factors point at this and stop short. One asks whether formal information-sharing or coordination arrangements exist. Another asks whether the venue maintains appropriate surveillance and trading prohibitions. Both reward the existence of a thing rather than what the thing does, and a venue can satisfy both with a document and a surveillance function nobody has tested.
The sport side of the relationship is specified in useful detail: a recognised governing body, an integrity unit, published rules, disciplinary procedures. The market side appears as a single word. Appropriate.
The NCAA saw part of this in July. It argued that a venue would face a substantial burden in certifying that an individual student-athlete contract satisfied its statutory obligations, including the obligation to list only contracts not readily susceptible to manipulation, and that where compliance cannot be certified the contract cannot be listed at all. Five weeks later the Ninth Circuit took the view that an exchange was unlikely to succeed in defending its self-certification and listing of the sports event contracts before it. On that reading the certification is doing more work than the review is, and the rule should be written on that basis.
The NFL and MLB converge on the other half of this. The NFL asks the Commission to preserve the existing structure under which suspension is requested during a review rather than left to discretion. MLB asks the Commission to generally exercise that discretion, observing that a 90-day review is a substantial part of a season and that letting a scrutinised contract trade throughout can render the review moot. Both are right, and the reason is the same one the volume figures illustrate.
Where I part company
Two asks on the file go further than I would go, and both come from the strongest filers.
MLB proposes that a league’s opposition to a contract become the primary negative public interest factor. The NBA states that leagues should have control over the types of markets offered on their competitions. Those are requests for a veto, and a veto is a different instrument from a channel. A channel supplies relevant information and obliges an accountable response to it. A veto determines the listing outcome regardless of the Commission’s own assessment.
The case for the channel is substantial and I have made it above. Governing bodies hold information the venue cannot see, and they should be consulted before novel contract types list. The case for the veto is weaker, because a governing body’s interests in a contract are not confined to integrity. Leagues have commercial partnerships with venues, media rights that markets affect, and reputational exposure to what trades on their sport. An objection grounded in integrity and an objection grounded in any of those look identical on the page. A rule that gives the objection determinative weight cannot tell them apart.
The 28 August decision sharpens this. With the injunction dissolved, Nevada’s regulators are no longer restrained from enforcing state gaming law against these contracts, and the panel’s reasoning is available to other states within the circuit. That gives governing bodies a route that was not open a week ago. A determinative federal objection layered on top of restored state enforcement is a larger ask than it was in July.
The Commission should assess what an arrangement does, not who is party to it, and should retain discretion to weigh it against the particular contract, sport and venue. That includes declining to name a body. Several filings edge towards designating who should perform the monitoring function. I hold no current mandate from any monitoring organisation and propose a role for none, including any I have been associated with.
And the no-safe-harbour language should stay exactly as drafted. Having infrastructure should count in a venue’s favour. It should never establish that a contract is fit to list.
Filed comment: RIN 3038-AF65, docket CFTC-2026-1189, comment CFTC-2026-1189-0054, submitted in a personal capacity, building on a joint comment on the Advance Notice, 30 April 2026. Companion comment on RIN 3038-AF73.