News: CFTC Cancels Prediction Markets Roundtable
A planned roundtable about the future of prediction markets like Kalshi has been canceled by the Commodity Futures Trading Commission.
The event — which had been planned for April 30 — had never been officially announced by the CFTC to the public. The Event Horizon understands that many attendees believed that it was still happening as of earlier today.
No reason was given to participants for the cancellation. Attendees were also told there was no update on when it would be rescheduled.
The Event Horizon understands that a number of representatives of state regulators, gaming interests, leagues and others had been invited to attend. Many had already booked travel to the event.
Earlier in the day, The Event Horizon had reached out to the CFTC about the timing of the roundtable. A CFTC employee said that there was no update on the roundtable or its announcement.
The brief history of the roundtable that wasn’t
The backstory on the roundtable:
The CFTC announced on Feb. 5 that it would hold a roundtable on prediction markets. This came shortly after Kalshi and Crypto.com had launched sports event contracts.
The CFTC has taken public comment since February in advance of the roundtable. You can see all the comments here.
The roundtable was supposed to take place 45 days after the close of the comment period, which was technically February 21. That means the roundtable should have happened earlier this month already.
The Event Horizon had understood the planned date to be April 30 for several weeks now.
What’s next for the CFTC and prediction markets?
The decision not to have the roundtable comes during considerable controversy around sports event contracts:
Six states have sent cease-and-desist orders to some combination of Kalshi, Crypto.com and Robinhood (which is listing some of Kalshi’s sports markets). These states believe prediction markets for sports amount to illegal sports betting in their jurisdictions.
Kalshi has filed lawsuits against three of those states — Nevada, New Jersey and Maryland — hoping to get federal courts to stop enforcement of the cease-and-desists.
Several states are reportedly investigating or monitoring sports events contracts but have not asked platforms to stop activity in their states.
More on the legal status of prediction markets.
The CFTC has said almost nothing as Kalshi and others have put the federal government and state gaming regulators at odds over the status of sports betting in the country.
Kalshi contends that because the CFTC has not told them to stop, that sports event contracts are legal. Meanwhile, states see it as a clear violation of their licensing and regulatory regimes.
Meanwhile, we have heard very little from the CFTC on any of it, letting chaos reign. What we do know:
From Reuters a month ago: “A CFTC spokesperson in a statement said the agency had concluded it ‘has no legal justification to prevent Robinhood from offering access to these contracts, which are listed on a CFTC-registered exchange.’
From one of Kalshi’s lawsuit filings: “In contrast to the action it took with regard to congressional control contracts, the CFTC declined to review Kalshi’s sports-related contracts. Unless and until the CFTC takes action on Kalshi’s sports-related contracts, they remain authorized under federal law. Several other federally-regulated exchanges began listing sports-related event contracts around the same time period. In response, the CFTC exercised its power to commence review of a sports-related event contract offered by NADEX/crypto.com—a designated contract market that the CFTC certified under the name HedgeStreet in 2004. The CFTC initiated its 90-day review period of the sports-related contracts on January 14, 2025. The Commission requested that NADEX/crypto.com suspend its sports-related contracts during the pendency of the review. But the CFTC never made a similar request to Kalshi.”
What the CFTC had said about the prediction markets roundtable two months ago
Here is part of the statement the CFTC had issued in February:
The goal of the roundtable is to develop a robust administrative record with studies, data, expert reports, and public input from a wide variety of stakeholder groups to inform the Commission’s approach to regulation and oversight of prediction markets, including sports-related event contracts. …
“Unfortunately, the undue delay and anti-innovation policies of the past several years have severely restricted the CFTC’s ability to pivot to common-sense regulation of prediction markets,” said Acting Chairman Caroline D. Pham. “Despite my repeated dissents and other objections since 2022, the current Commission interpretations regarding event contracts are a sinkhole of legal uncertainty and an inappropriate constraint on the new Administration. Prediction markets are an important new frontier in harnessing the power of markets to assess sentiment to determine probabilities that can bring truth to the Information Age. The CFTC must break with its past hostility to innovation and take a forward-looking approach to the possibilities of the future.
“As the preeminent federal regulator mandated to oversee the $400 trillion notional derivatives markets that drive the real economy and safeguard the public interest, the CFTC is required to follow the rule of law and the Administrative Procedure Act to change course. This roundtable is a necessary first step in order to establish a holistic regulatory framework that will both foster thriving prediction markets and protect retail customers from binary options fraud such as deceptive and abusive marketing and sales practices. The CFTC appreciates the proactive engagement from market participants and looks forward to working together to support innovation while ensuring robust customer protection in our markets.”
The CFTC has identified several key obstacles to balanced regulation of prediction markets: existing Commission orders issued to designated contract markets (DCMs) pursuant to regulation 40.11 and related Commission interpretations; Commission rulemakings on event contracts; federal circuit court of appeals and district court orders and opinions, including that “gaming involves games”; the CFTC’s legal arguments and litigating positions in several ongoing federal court cases; CFTC-registered entities’ legal arguments in court that event contracts based on games or sports contests or sporting events constitute “gaming” and are therefore prohibited under the Commodity Exchange Act; staff interpretations, other guidance, and current practices on event contracts; existing law and regulation applicable to DCMs and futures commission merchants (FCMs); CFTC examinations, enforcement actions, and investigations; and other issues including but not limited to Constitutional questions such as the Commerce Clause, States’ rights and State regulatory schemes, Federalism, Federal preemption doctrines, and Tribal sovereignty as well as other federal laws applicable to sports betting.