Crypto.com, one of the first US-regulated exchanges to offer contracts tied directly to game results, has introduced a three-second delay on all sports wagers for regular users. Professional market makers, however, are exempt from this pause, allowing them to adjust prices before rapid changes from other customers affect the market.
This delay specifically impacts individuals placing real-time bets on scores and final outcomes. The change was formally cleared through a filing sent to the Commodity Futures Trading Commission (CFTC) on July 30 and was subsequently included in the platform’s public FAQs.
The exemption for market makers, often full-time professional trading firms, enables them to modify prices before fast-moving customer orders are processed. This creates a potential disadvantage for users physically present at sporting events who might observe goals, fouls, or injuries before those watching on television, as they could be betting on information that has already been acted upon by exempt traders.
A spokesperson for Crypto.com stated that the change is intended to "support liquidity and fairness" and is a "disclosed rule in our FAQs." The exchange further explained that the rule is designed to manage significant price fluctuations during live games, where betting volume and potential losses can escalate rapidly within seconds.
Kalshi Files for Order Delays
Crypto.com is not alone in implementing such measures. Kalshi Inc., another prominent prediction market exchange, has also submitted regulatory paperwork to the CFTC that would permit it to delay certain orders within its system.
This proposal is currently undergoing a ten-business-day review period by the CFTC. The filing does not specify which users would be subject to the slowdown or if any groups would receive exemptions. If the CFTC raises no objections during this review, the delay could be enacted as early as the current week.
The trend toward implementing order delays comes as prediction markets experience rapid growth, largely fueled by substantial trading activity surrounding sports events. These platforms aim to enhance liquidity and tighten pricing, which is contingent on attracting major market-making firms.
Delays are seen as a mechanism to mitigate risk for these firms during periods of rapid price movements. Similar policies in equity and derivatives trading have previously faced criticism, with opponents arguing that rules favoring high-speed trading firms undermine the principle of equal access.
If prediction markets adopt this approach, their claims of offering a level playing field against traditional sportsbooks may face increased scrutiny.
Delays Target Courtsiders
While a three-second delay might seem minor, it can be a critical factor in live betting. A single score or injury can significantly alter odds before most screens have a chance to refresh.
Alfonso Straffon, a consultant with prior experience as a sports trader and gaming research analyst at Deutsche Bank AG, linked the new delay to the practice of courtsiding. Courtsiding involves placing bets from within a venue before sportsbooks and exchanges update their odds for the broader market.
Straffon explained, "This three-second delay really protects market makers from courtsiders or even individuals that correctly anticipate a sudden, market-wide move in the odds."
The delay implemented by Crypto.com applies to all non-market-making customers, not exclusively to those attempting to exploit courtsiding. This structure is designed to benefit large liquidity firms that trade at scale.
Major firms like Susquehanna International Group and Jump Trading are active participants on Kalshi. Kalshi also operates its own internal market-making unit on its exchange.
This internal unit is currently the subject of a proposed class-action lawsuit filed by retail traders who allege the company profits by betting against its own users.
Luana Lopes Lara, co-founder of Kalshi, stated in a recent social media post that the trading arm operates independently under separate management and receives "no preferential treatment" on the platform.