Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
A group of Twenty-three Democratic US senators sent a letter on Friday to the top federal regulator overseeing prediction markets, urging the agency to avoid weighing in on pending court cases over the legality of offers on platforms linked to “sports, war and other prohibited events.”
The popularity of prediction markets, which sell contracts linked to the outcomes of real-world developments, has boomed over the past year, attracting a growing fan base eager to bet on everything from geopolitical conflicts to geopolitical conflicts. Fashion choices To the Super Bowl. As they expand, these platforms have become a magnet for ethical and legal controversy. For example, on Thursday, Israeli authorities announced the arrest of two people on suspicion of using classified military information Place bets At Polymarket, one of the biggest players in the industry.
The senators’ letter reflects a growing divide over how to deal with Polymarket and competitors like Kalshi. The US government currently considers prediction markets to be derivative markets, which means they fall under the jurisdiction of the Commodity Futures Trading Commission. But state authorities, who have emerged as the industry’s harshest critics, argue that platforms should be subject to the same local regulations as gambling products.
There are at least 19 ongoing federal lawsuits challenging the legality of calci, according to analysis By National Public Radio. In one case in Massachusetts, a judge banned this Company From providing sports contracts after the state filed a lawsuit against it on charges of operating without a gambling license. Then Polymarket introduced a Counterclaim v. Massachusetts, arguing that state regulators had no authority over its actions.
In his first public comments about prediction markets since taking office in December, Michael Selig, Chairman of the Commodity Futures Trading Commission (CFTC), said… Suggested The agency may pick up the fight, noting that it has “the experience and responsibility to defend its exclusive jurisdiction.”
Now, a cadre of senators led by Adam Schiff of California is urging the CFTC to stay out of lawsuits in the state. Their letter also asks the agency to prohibit prediction markets from offering gaming contracts, as well as contracts that involve “war, terrorism, assassination, or other activities mentioned.” Signatories include Cory Booker, Amy Klobuchar, and Ron Wyden. The CFTC did not respond to requests for comment.
During the Biden administration, the CFTC attempted to place barriers on some aspects of prediction markets. In 2024, for example, the independent agency proposed banning the sale of some types of contracts, including those related to sports and politics.
But under the Trump administration, the CFTC has taken a radically different approach. After Selig took office in December, the CFTC scrambled. withdraw Proposing the ban and creating a new advisory board that includes the CEOs of all the largest prediction market companies. When former New Jersey Gov. Chris Christie suggested on social media this week that prediction markets were violating the law, Selig issued a brief statement. answer“I strongly disagree.”
Speaking on Bloomberg Odd Lots Podcast This week, Selig outlined his vision for regulating the industry, rejecting the idea that prediction markets should be seen as the equivalent of sports gambling. “These aren’t bets, you’re not betting against the house,” he said. “We have a significant overlap from a regulatory standpoint around these markets. So we don’t monitor certain categories of markets or elections or sports by having different standards.”
In their letter, the senators urged Selig to change course. “These products evade state and tribal consumer protections, generate no public revenue, and undermine sovereign regulatory systems,” the senators wrote.
Meanwhile, prediction market industry advocates say the CFTC is already on the right track. “We think the chairman is absolutely right to assert the agency’s exclusive jurisdiction over the country,” says former US Representative Sean Patrick Maloney, who now heads the lobby group Predictive Markets Alliance. “No state gaming commission would ever have the authority to provide oversight of derivatives markets generally.”
As the regulatory battle over prediction markets continues, more companies are racing to get in on the action. A number of online sports gambling companies including DraftKings have recently unveiled their own offers. So is Truth Social, the social media company in which President Donald Trump and his family own a majority stake Preparation Its own product, Expect the Truth. Expected offerings include opportunities for “events in all major sports leagues.”