The U.S. Commodity Futures Trading Commission has received more than 1,500 public responses on its proposed rule for prediction market event contracts.
Summary
- CFTC has received more than 1,500 public comments on its prediction markets rule, with firms backing its authority while state regulators push back.
- Kalshi, Polymarket, and Andreessen Horowitz supported the CFTC, urging it to retain exclusive control over event contracts.
- State gaming regulators from Pennsylvania, Tennessee, and Missouri said sports contracts resemble unregulated betting and should fall under state oversight.
According to the CFTC, the comment period for its March proposal closed Thursday after drawing submissions from prediction market operators, crypto firms, venture investors, and state-level gambling authorities, each weighing in on how event contracts should be regulated.
In a letter submitted Thursday, Kalshi co-founder and chief operating officer Luana Lopes Lara said the Commission’s current framework is “well-designed and effective,” urging regulators to provide clarity so that “the universe of event contracts can continue to be listed, traded, and overseen by the Commission.” Her comments framed the rulemaking as a chance to reinforce existing oversight rather than impose new restrictions.
Polymarket’s U.S. CEO Justin Hertzberg echoed that position in a separate letter addressed to CFTC Chair Mike Selig, writing that the agency should continue “asserting the CFTC’s longstanding exclusive jurisdiction over prediction markets.” Hertzberg added that the company believes the regulator must retain sole authority over the sector, a stance that aligns with ongoing legal disputes.
Andreessen Horowitz also backed the Commission, stating in its submission that state-level efforts to regulate or block prediction markets create “a serious barrier to impartial access,” which it argued conflicts with obligations placed on CFTC-regulated entities.
In the meantime, legal pressure from states has continued to build alongside the rulemaking. Kalshi, Polymarket, and Coinbase have each faced lawsuits tied to sports-based event contracts, while the CFTC has taken its own legal action against at least five state governments that challenged prediction platforms, defending its jurisdiction in court.
Pennsylvania Gaming Control Board Executive Director Kevin O’Toole wrote that prediction markets are being allowed “to masquerade as unregulated sportsbooks,” while Tennessee Sports Wagering Council Executive Director Mary Beth Thomas said her agency disputes “that sports event contracts offered on prediction markets fall within the jurisdiction of the CFTC at all.”
Rule builds on earlier compliance push
As previously reported by crypto.news, in its March 12 staff advisory, the CFTC instructed designated contract markets to apply full Part 38 oversight to event contracts, with particular scrutiny on sports-related products. In that notice, the agency said exchanges must remain bound by the Commodity Exchange Act and ensure compliance through product review, surveillance, and ongoing monitoring.
CFTC guidance tied that expectation to Section 5(d) of the Act and Core Principle 3 under Part 38, placing responsibility on exchanges to act as frontline regulators of listed contracts as trading activity grows.
Federal lawmakers and consumer groups have also raised concerns about how certain contracts could be used.
Dennis Kelleher, CEO and co-founder of Better Markets, joined 12 advocacy groups in a joint letter urging the CFTC to “prohibit event contracts that involve elections or geopolitical events,” arguing such markets could influence government decision-making.
Recent scrutiny has extended to geopolitical betting activity. Lawmakers have pointed to trading tied to the Iran war, where well-timed positions raised questions about potential use of non-public information.
Kalshi and Polymarket responded last week after the U.S. Senate passed a ban on its members and staff using prediction markets, stating that both platforms have strengthened controls around insider trading and restricted access for certain users, including politicians.
