CFTC Closes Comments on Prediction Markets Rule

The U.S. Commodity Futures Trading Commission closed a public comment period on Thursday for a proposed rule introduced in March that would expand its authority to regulate event contracts on prediction market platforms. The initiative drew more than 1,500 responses from prediction market operators, cryptocurrency firms, venture capital investors, consumer advocacy groups and state gambling regulators, highlighting a sharp divide over federal versus state oversight.

The rule aims to codify the CFTC's jurisdiction over these contracts, allowing the agency to issue tailored regulations on market listings, disclosures and enforcement. Industry participants largely welcomed the proposal as a means to provide regulatory clarity and prevent fragmented state-level rules. Kalshi co-founder and Chief Operating Officer Luana Lopes Lara wrote in a letter to the commission that its "current framework is well-designed and effective" and urged guidance to ensure a broad range of event contracts can be listed, traded and overseen federally.

Polymarket U.S. CEO Justin Hertzberg echoed the sentiment, praising CFTC Chair Mike Selig in his submission for affirming the agency's "longstanding...