Sports Event Contracts and the Risk of Information Leakage

Sports event contracts have exploded in popularity since the first prediction market began offering contracts on whether the Chiefs or Eagles would win the Super Bowl. Beyond the risk that athletes and insiders will profit from events they can control, prediction markets create a new risk that sports betting does not: information leakage. Skadden partners Karen Hoffman Lent, Anthony Dreyer and Robert Fumerton discuss insider trading risks, CFTC enforcement tools and the steps prediction markets are taking to police these contracts.