Crypto.com implements a three-second delay for retail users in its sports event-betting market

In a segment where speed defines pricing, risk and opportunity, Crypto.com has introduced a rule that once again places the spotlight on the tension between professional operators and retail clients in the US event-betting ecosystem. The platform, one of the first regulated exchanges in the country to list contracts tied to sports outcomes, has applied a three-second delay to the execution of orders placed by retail users engaging in live sports prediction markets.

The measure, disclosed in the exchange’s own documentation, does not affect all participants equally. According to the information published, the three-second lag applies to users who do not function as market makers, while professional liquidity providers continue to operate without this technical pause. In practice, this gives market makers the ability to adjust or withdraw their quotes before retail orders are executed, especially during in-play markets where a decisive play or score change can alter probabilities within seconds.

Crypto.com argues that the change is intended to reinforce liquidity and order-book stability. A company spokesperson stated that the rule “supports liquidity and fairness” and emphasised that it is clearly disclosed in the platform’s FAQs. The exchange had already prepared the regulatory groundwork through a filing submitted to the Commodity Futures Trading Commission (CFTC) on 30 July, the federal regulator responsible for derivatives and certain event contracts.

Crypto.com is not the only player in the growing prediction-market sector considering execution delays. Kalshi Inc., another major exchange in this space, recently filed documentation with the CFTC seeking approval to impose its own order delays. The proposal is currently under the regulator’s standard ten-day review period and does not specify which categories of customers would be subject to the measure. If the CFTC raises no objections, the rule could come into effect in the near term.

The rapid expansion of prediction markets in recent months, fuelled largely by sports-linked contracts, has intensified competition to attract large market-making firms capable of providing depth and volume. For such participants, protection against sudden probability swings, including potential courtsiding scenarios where individuals near the action attempt to trade on information ahead of the market, is a critical factor. Execution delays have therefore emerged as a tool to mitigate those risks and make the environment more appealing for liquidity providers.

Yet granting operational advantages to certain types of participants is neither new nor uncontroversial. In previous years, stock exchanges and derivatives venues faced scrutiny for policies seen to favour high-frequency firms, raising concerns that retail investors were operating on an uneven playing field. The debate is now extending into prediction markets: if these exchanges follow a similar path, the industry’s narrative of a “level playing field” compared with traditional sportsbooks could come under pressure.

Following initial coverage of its filing, a Kalshi spokesperson downplayed the likelihood of implementing the proposed delay, noting in an email that the submission “is only a filing” and that the company may ultimately decide not to proceed. That clarification reflects a broader concern shared across the sector: while increasing the appeal for major liquidity providers is strategic, the perception of fairness and the potential for regulatory pushback remain central considerations.

Against this backdrop, Crypto.com’s decision serves as an early test of how far US sports event-betting exchanges can differentiate the treatment of professional participants and the general public without undermining user trust or triggering heightened scrutiny from regulators and legislators. The market’s reaction, and the response from the CFTC, will be crucial in shaping the next phase of convergence between financial trading and sports betting in the United States.