A business called InPlay is looking to use SEC approval to launch a securities marketplace tied to sports performance in the US, potentially representing an entirely new regulatory mechanism.
Last week the business issued a press release announcing the appointment of Troy Kane as its president and COO, who will be charged with creating the world’s first regulated securities “tied to the real-time performance of college and professional sports teams”.
It follows several businesses using a new interpretation of US commodities law to launch sports contracts on prediction markets regulated by the country’s derivatives regulator the Commodity Futures Trading Commission, which critics accuse of being sports betting by another name.
Edwin Johnson, InPlay Global founder and CEO, said: “Financial markets price commodities, equities, and risk, but they have never priced real-world competitive performance.
“InPlay is changing that by introducing a regulated market structure where performance can be evaluated, traded, and risk-managed transparently. We are not building a gaming product; we are building a market.”
In his new role, Kane will oversee InPlay’s market operations, regulatory strategy and tech infrastructure.
The company said it would look to commercialise following regulatory approval from the Securities and Exchange Commission, as well as seeking approval for its Alternative Trading System, InPlay Markets, from the Financial Industry Regulatory Authority.
Kane added: “Performance Securities apply market discipline to something universal, competition. This is not betting, and it isn’t a synthetic stock game.
“It’s a regulated financial marketplace designed around transparent price formation, neutral market operations, and unified liquidity. I am excited to help bring this new market category to life alongside Edwin and the InPlay team.”
The business argued Performance Securities are not sports betting and are instead regulated financial instruments that provide economic exposure to the performance of college and professional sports teams.
Vince Gennaro, executive director of the NYU Lab for Transformative Leadership, School of Professional Studies, said, “In a transformative move, InPlay Global’s birth of a new US regulated asset class is innovative and game changing. Instead of short-term binary outcomes and prop bets, investors and fans can trade a stake in a sports teams’ performance over the duration of a season.
“These new financial markets equities will democratise investment in sports teams’ performance.”
However gaming lawyer Daniel Wallach, who has helped lead the charge against sports prediction markets in the US, told NEXT.io: “Season-long is just the camel’s nose under the tent. Once approved, it will soon be expanded to more accelerated offerings like individual games or occurrences within games, mirroring the dramatic escalation which is taking place in CFTC prediction markets.
“That’s the Kalshi playbook. It’s the continuation of a federal agency takeover of sports gambling without rule-making and without any specific congressional authorisation. A bloodless coup.”
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