CFTC Draws More Than 1,500 Comments on Prediction-Market Rule Changes as Jurisdiction Fight Grows

The US Commodity Futures Trading Commission's push to revise prediction-market rules has exposed a divide between industry participants and regulators over how the products should be overseen.

Cointelegraph reported on May 4 that the CFTC had received more than 1,500 comments on proposed rule changes for prediction-market event contracts that it put forward in March. Prediction-market platforms, cryptocurrency companies and consumer groups were among those that submitted comments.

Some industry participants backed the CFTC's existing authority. Luana Lopes Lara, chief operating officer at Kalshi, said the current regulatory framework is effective and called for clear guidance so prediction-market products can continue trading.

Polymarket also supported keeping the CFTC in charge. Justin Hertzberg, chief executive officer of Polymarket US, said the agency should retain exclusive jurisdiction over prediction markets. Andreessen Horowitz, the venture capital firm, also backed the CFTC's position, arguing that state-by-state regulation could restrict market access.

Some state regulators objected strongly. The Pennsylvania Gaming Control Board and the Tennessee Sports Wagering Council criticized the CFTC's approach, saying prediction markets are effectively akin to unlicensed sports betting.

The dispute comes as the CFTC seeks to expand its regulatory authority over prediction markets. Kalshi, Polymarket and Coinbase are involved in legal disputes with multiple state governments over related products.

Some federal lawmakers and consumer groups have also raised concerns about prediction-market products tied to geopolitical events or elections. Better Markets argued that such contracts could influence policymaking and should be restricted.

Major platforms including Kalshi and Polymarket have responded by limiting access for certain users, including politicians, as part of efforts to prevent insider trading.