The rule, proposed in March, would allow the commission to amend or issue new regulations for event contracts traded on prediction market platforms.
Crypto News
The US Commodity Futures Trading Commission received more than 1,500 public responses after its comment period on a proposed prediction market rule closed Thursday. Submissions came from prediction market operators, crypto firms, state gambling regulators, and consumer advocacy groups, with respondents divided on how far the CFTC's authority should extend.
The rule, proposed in March, would allow the commission to amend or issue new regulations for event contracts traded on prediction market platforms. The CFTC has framed it as a step toward cementing its oversight of a sector facing legal challenges from multiple US states, which argue the platforms offer unlicensed sports gambling.
Kalshi, Polymarket, and Coinbase are among the companies that have been sued by states over their sports event contract offerings. All three have argued that they fall under the CFTC's exclusive jurisdiction, a position the commission has backed by suing at least five state governments that moved against prediction market platforms.
Kalshi co-founder and COO Luana Lopes Lara submitted a letter backing the CFTC, describing its existing regulations as "well-designed and effective." She urged the commission to provide guidance ensuring that event contracts can continue to be listed, traded, and overseen at the federal level. Polymarket US CEO Justin Hertzberg similarly praised CFTC Chair Mike Selig for asserting the commission's jurisdiction and called on it to maintain that position.
Venture capital firm Andreessen Horowitz also sided with the CFTC, arguing in its submission that state efforts to regulate or ban prediction markets impose barriers to impartial access, a standard requirement under CFTC rules for regulated firms.
State gambling regulators pushed back. Pennsylvania Gaming Control Board Executive Director Kevin O'Toole said the CFTC was allowing prediction markets to "masquerade as unregulated sportsbooks." Tennessee Sports Wagering Council Executive Director Mary Beth Thomas disputed that sports event contracts on prediction markets fall within CFTC jurisdiction at all. Missouri Gaming Commission Executive Director Michael Leara argued that Congress did not intend futures markets to cover gambling activities and urged the commission to leave authority over sports event contracts to the states.
Consumer groups raised a separate set of concerns. Better Markets CEO Dennis Kelleher, joined by 12 other organizations, submitted a joint letter urging the CFTC to prohibit event contracts tied to elections or geopolitical events, arguing such markets could influence government decision-making.
Federal lawmakers have also raised concerns about contracts on geopolitical events and the potential for insider trading, following well-timed bets placed before significant international developments. Kalshi and Polymarket said last week, after the US Senate passed a ban on its members and staff using prediction markets, that they have taken steps to restrict insider trading and block certain users, including politicians, from their platforms.
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