CFTC to host public roundtables to investigate prediction markets
Recently appointed acting chair Caroline Pham has stressed the need for the US derivatives regulator to implement a “forward-looking approach” amid Crypto.com and Kalshi sports event contract launches
Commodity Futures Trading Commission (CFTC) acting chair Caroline Pham has unveiled plans for a series of public roundtables to discuss “evolving trends and innovation”, including prediction markets.
The US derivatives regulator, which includes futures, options and swaps, has noted it will spend the next several months engaging with industry leaders and market participants to ascertain the “best information and latest data.”
The CFTC said it would specifically explore prediction markets, alongside digital assets, and “affiliated entities and conflicts of interest.”
Prediction markets have exploded in the US following the success for the likes of Kalshi and Robinhood around the US presidential election in November.
Then, in December, Crypto.com introduced sports event contracts on sporting events like the Super Bowl, effectively pushing sports betting futures markets into all 50 US states.
The CFTC had requested Crypto.com pause the offering, which the Singapore-based crypto trading platform declined to do.
Kalshi soon followed Crypto.com as it rolled out event contracts on major US sporting events, including next month’s Super Bowl.
Kalshi filed with the CFTC to list contracts on “American sports leagues” ahead of the market’s launch on January 23.
Kalshi’s sports markets have also extended beyond the winner of the Stanley Cup and Super Bowl, with options to trade on both the AFC and NFC finals over the weekend.
The prediction market also has options up for the NBA and NHL finals, as well as college basketball.
Kalshi’s sports event contracts are also accessible in all 50 US states, including California and Texas, the two most-populous US jurisdictions without legal sports betting.
Users of the platform have to be 18 years of age, whereas traditional sports betting is generally 21 and above in regulated states.
“As I have long said, the CFTC must take a forward-looking approach to shifts in market structure to ensure our markets remain vibrant and resilient while protecting all participants,” Pham explained.
“Innovation and new technology has created a renaissance in markets that presents new opportunities that are accessible to more people, as well as risks.
“The CFTC will get back to basics by hosting staff roundtables that will develop a robust administrative record with studies, data, expert reports, and public input.
“A holistic approach to evolving market trends will help to establish clear rules of the road and safeguards that will promote US economic growth and American competitiveness,” she added.
Pham was selected by President Donald Trump to lead the CFTC in an interim capacity following his inauguration earlier this month. Trump’s son, Don Jr, is now a special adviser to Kalshi.
The CFTC’s new acting chair has previously indicated her support for event contracts, having publicly dissented against a CFTC ruling that recognized event contracts as a form of gaming and banned them.
Pham argued that the ruling represented a “wasted opportunity.”
At the time, she said: “I respectfully dissent from the event contracts proposal because it takes the CFTC’s regulation of event contract markets backwards with its fundamental misunderstanding of how we regulate derivatives and the states regulate gaming.”