SEC Opens Public Comment on Prediction-Market ETFs

The US Securities and Exchange Commission has opened a public comment process for exchange-traded funds tied to prediction markets.

On May 20, Bloomberg ETF analyst Eric Balchunas wrote on X that the SEC was seeking public comments on prediction-market ETFs.

Balchunas wrote that the agency appears to be debating the structure of the products internally and wants more time and feedback.

He added that prediction-market ETFs are a completely new type of product, similar to cryptocurrency ETFs, and that the SEC wants to be sufficiently confident before allowing them into the market.

Prediction markets are platforms that let users invest on the likelihood of specific events. In the US, the market has been expanding rapidly, led by platforms such as Kalshi and Polymarket.

US regulators are still discussing how to oversee the sector, as contracts tied to sports events, political events, wars and climate outcomes are viewed as having similarities to gambling.