The Commodity Futures Trading Commission has told prediction-market operators Novig and ProphetX not to list a set of sports event contracts the two companies had already self-certified, according to Front Office Sports . The agency also asked both firms to explain how the markets would comply with federal commodities law.

A CFTC spokesperson confirmed that letters had been sent to both companies. “Any derivatives contract offered by a CFTC-regulated exchange must be compliant with the Commodity Exchange Act,” the spokesperson said.

Micro contracts and scorigami

The two letters target different products. Novig was told that its micro contracts, such as a market on which player opens the scoring in a basketball game, are open to manipulation.…