CME Plans Futures Tied to Sports to Be Used as New Hedging Tool

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(Bloomberg) — Another tool is in the works that lets investors bet on their favorite sports teams, this time using traditional derivative products. 

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Exchange operator CME Group Inc. is planning to offer futures and options contracts tied to professional and college sports, according to a statement seen by Bloomberg News. The firm is working with FutureSports, an upstart index provider whose products will underpin CME’s new tools. 

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The first sports futures contracts, which will be cash-settled and expire on a monthly and quarterly basis, could begin trading as soon as this summer, pending regulatory approval, according to the statement. 

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“This isn’t just a new product — it’s about bringing real price discovery and risk management discipline to an industry that’s ready for it,” CME Chief Executive Officer Terry Duffy said in the statement. 

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Futures contracts are common in financial markets based on equity indexes and commodities globally. If approved, the new offering would be the first of its kind for the sports industry. 

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Historically, CME has been a venue for farmers, energy producers, manufacturers and institutional traders to use futures to hedge risks such as price swings. In recent years, the derivatives exchange has taken steps to expand its client base by adding new products that appeal to retail investors.

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Until now, investors looking to speculate on the sports industry have gone to traditional sports-betting platforms or prediction markets such as Kalshi and Polymarket. Those exchanges offer binary yes-or-no wagers on the outcome of games or a player’s performance. 

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In response to the rapid rise of prediction markets and the sports-gaming industry, traditional Wall Street firms have made moves of their own. CME, for its part, partnered with FanDuel, the online gambling division of Flutter Entertainment Plc, and added event contracts to appeal to a broader swath of traders. 

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By listing regulated futures contracts tied to sports, CME would bring the industry a step closer to the traditional financial markets. The exchange is also making a bet of its own that institutions will use the new futures to protect against potential losses related to sports. 

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“We’re seeing incredible demand for these unique new contracts as hedging instruments from a broad range of potential participants, from stadium owners and operators, to sports sponsors and endorsers, insurers, sports apparel manufacturers and league broadcasting partners,” Leigh Taylforth, co-founder of FutureSports, said in the statement. 

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For the futures contracts to be successful, the index’s underlying data needs to be both uniform and trusted by market participants. FutureSports said sports leagues will be the official data source, but they won’t participate in index determination or governance.  

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The two Chicago-based companies said they plan to announce more details about the products in coming weeks, including several partnerships between FutureSports and professional sports leagues, turning team and athlete statistics into the benchmark indexes.

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