The CFTC Told Novig and ProphetX Not to List Their First-Points and Scorigami Contracts
The Commodity Futures Trading Commission sent letters this week telling Novig and ProphetX not to list sports event contracts they had self-certified, and asking both to explain why the contracts comply with federal commodities law, Front Office Sports reports. Self-certifying means each exchange filed a statement that the contract follows the law and could list it without waiting for approval. A CFTC spokesperson confirmed the letters. None of the contracts had listed, so nobody has traded them.
The two companies got different objections. Novig was told its micro contracts, such as who scores the first points in a basketball game, are susceptible to manipulation. ProphetX was told its “scorigami” contracts, which pay on a game ending in a final score never recorded before in the sport, do not meet the definition of a swap under the Commodity Exchange Act, the federal law over futures and options trading, which means they may not be allowed on its exchange at all. Multiple sources told FOS the letters describe the filings as false self-certifications.
In a statement, the spokesperson said any contract on a CFTC-regulated exchange “must be compliant with the Commodity Exchange Act,” and called the move a “rejection of ‘micro trades'” reflecting a commitment from Chairman Michael Selig and the agency “to protect consumers from potential fraud or manipulation.”
ProphetX describes it differently. Its spokesperson said staff “requested that we voluntarily defer listing the Scorigami contracts pending further review, not that we withdraw them,” that the company complied, and that it has since sent “additional analysis supporting the contracts’ regulatory compliance and economic utility.” Novig didn’t immediately respond to FOS. The CFTC wouldn’t say whether this is the first time it has demanded that an operator pull a self-certified sports contract.
Under CFTC Regulation 40.2, an exchange files the contract’s terms, an analysis of how it complies with the law and a certification that it does, and the agency has to receive the filing by the open of business on the business day before listing. The same rule obliges an exchange to hand over more evidence that a contract meets the law if staff ask for it.
ProphetX’s filing was public. PredictionMarketPulse’s Oct. 19 weekly describes “NFL Weekly Scorigami,” which resolves Yes if any game that week ends in a final score never before recorded in NFL history, certified alongside a first-touchdown contract keyed to the game clock.
CFTC staff have flagged this kind of manipulation risk before. On Sept. 22, CFTC staff issued Letter 26-27 on “mention market” contracts, warning they carry “a heightened risk of manipulation because their settlement turns on the discrete conduct of a person,” and reminding exchanges of their obligation to list only contracts “not readily susceptible to manipulation.” A first-points contract settles on one scoring play, which is the same worry moved onto a basketball court.
The ProphetX objection reaches further. A manipulation finding is about how a particular contract is built. A finding that a sports contract isn’t a swap goes to whether it belongs on a federal exchange in the first place, and the swap label is the exchanges’ legal footing against the states. On Oct. 16, Novig’s exchange, Ludlow, sued Missouri officials alleging its sports contracts are “quintessential swaps” under the CFTC’s exclusive jurisdiction, PredictionMarketPulse reports. As FOS describes the letter, the CFTC applied its finding to the scorigami contracts only.
The pressure on these bets is coming from the leagues too. One source told FOS the Novig and ProphetX markets are the kinds of contracts pro leagues have given the “most negative feedback” about. Last week the NBA restricted the player props and micro bets its sportsbook partners can offer, including first-basket bets, a rule that covers sportsbooks and not prediction markets. Sources say other exchanges have voiced frustration to the CFTC, and that senior CFTC officials have warned companies including DraftKings and FanDuel they risk similar action if they list micro contracts.
Sources call this part of a “broader cleanup” by Selig ahead of a final rule. Last month the CFTC sent Kalshi, Polymarket, Rothera and Novig letters seeking information on their incentive programs, FOS reported, after an August staff advisory, Letter 26-23, laid out what exchanges must include when they self-certify those programs. Novig cut its referral credit from $10 to $5 in a filing prepared under that guidance, per PredictionMarketPulse. In June the agency proposed a 267-page rule that would restrict in-game props and limit markets on high school sports.
On these sports contracts, the CFTC didn’t leave the first call to the exchanges.
Sources
- Front Office Sports: Novig, ProphetX Told to Pause Scorigami, Micro Contract Plans
- PredictionMarketPulse: PMP Weekly, October 19, 2026
- CFTC Staff Letters (Letters 26-27 and 26-23)
- eCFR: 17 CFR 40.2, Listing products for trading by certification
Discover more from Bitter Fool
Subscribe to get the latest posts sent to your email.