The CFTC’s proposed rule on event contracts has drawn over 1,500 responses, with prediction market platforms supporting the regulator’s authority and state gambling officials urging a tougher stance. The debate centers on whether these markets fall under federal commodities regulation or constitute illegal sports gambling under state law.
The U.S. Commodity Futures Trading Commission (CFTC) has concluded a public comment period on a proposed rule for event contracts, receiving significant feedback from industry and regulators. Prediction market platforms Kalshi and Polymarket expressed support for the CFTC’s oversight, while state gambling authorities criticized the move.
Kalshi COO Luana Lopes Lara stated the CFTC’s existing regulations were “well-designed and effective,” in a letter urging continued guidance. Polymarket US CEO Justin Hertzberg similarly applauded CFTC Chair Mike Selig for “asserting the CFTC’s longstanding exclusive jurisdiction over prediction markets,” in a separate letter. Venture capital firm Andreessen Horowitz also backed the CFTC, arguing state actions create barriers to access.
In contrast, state gambling regulators called for a stricter approach. Pennsylvania Gaming Control Board Executive Director Kevin O’Toole said the CFTC was allowing platforms to masquerade as unregulated sportsbooks. Missouri Gaming Commission executive director Michael Leara said Congress did not intend futures markets to cover gambling, urging jurisdiction be reserved for states.
Consumer advocacy groups raised concerns about contracts tied to elections or geopolitical events. Dennis Kelleher of Better Markets, alongside other groups, told the CFTC in a letter it should “prohibit event contracts that involve elections or geopolitical events,” citing potential influence on government actions. The platforms have faced legal challenges from multiple states and increased scrutiny following well-timed bets on geopolitical events.
