CFTC cancels roundtable on sports prediction markets

The Commodity Futures Trading Commission (CFTC) has canceled a scheduled policy roundtable that was set to address concerns from groups arguing that sports prediction markets violate state gambling laws.

The agency, which oversees sports event contracts offered by companies such as Kalshi, Crypto.com, and Robinhood, has not yet indicated whether the roundtable will be rescheduled.

Earlier in the month, a CFTC official told Sportico that the event would be restructured into a “forum or hearing” featuring several stakeholder panels. Further details were expected last week, but the agency has since remained silent. Event Horizon, a Substack publication, first reported the cancellation, which was later confirmed by a source involved in the discussions.

The reason for the sudden delay remains unclear, leaving stakeholders scrambling for answers. Over the past month, prediction market platforms have faced a surge of cease-and-desist orders, while the debate over federalism versus states' rights intensifies.

In response, Kalshi has filed lawsuits in key jurisdictions, including Nevada, where a district court issued a preliminary injunction allowing the company to continue operations. It has also filed suits in New Jersey and Maryland. Meanwhile, several other states have issued cease-and-desist orders since March Madness began.

The move adds fresh uncertainty to the regulation of sports event futures, a relatively new financial product facing mounting legal scrutiny nationwide. These contracts, also known as prediction markets, allow participants to wager on the outcome of events—including sports contests and elections—and are currently outside the scope of state gambling regulations, taxes, or oversight.

Critics, including tribal groups and casino interests, argue that these markets are unregulated sports betting and should be overseen by states. Meanwhile, legal experts believe Kalshi's legal battles with regulators over CFTC jurisdiction could escalate to the U.S. Supreme Court.

Kalshi said that the CFTC has sole authority over these markets, as granted by Congress in the Commodity Exchange Act. Meanwhile, CFTC Acting Chair Caroline Pham, who assumed the role this year, has emphasized a desire to avoid "regulation by enforcement," opting instead for a “holistic regulatory framework” for fostering thriving prediction markets.

In a February memo, the CFTC outlined several challenges in establishing balanced regulations, such as the Commerce Clause, state regulatory systems, preemption doctrines, tribal sovereignty, and other federal laws governing sports betting, iGaming Business reported. 

Since then, the Trump administration nominated former CFTC Commissioner Brian Quintenz to lead the agency, who currently serves on Kalshi’s board.

The CFTC initially announced the roundtable on February 5, following a public comment period. Various stakeholders, including tribal groups and Major League Baseball, have argued for state-level regulation of sports futures trading.