SEC, CFTC to hold joint roundtable on prediction markets

The U.S. Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) will convene a joint roundtable on September 29 to examine event contracts and prediction markets, as regulators seek to bring clarity to a sector marked by rapid growth and fragmented oversight.

The meeting will also consider proposals to expand 24/7 trading, harmonize portfolio margining rules, and create innovation exemptions, the agencies said in a joint statement.

Novel products are shrouded in fragmented oversight and legal uncertainty, the regulators said, noting that cryptocurrency trading and event contracts have outpaced existing frameworks. “Prediction markets, while they have existed around the world for decades, are undergoing rapid growth with growing demand from both market operators and the public," they added.

Operators, including Kalshi, Robinhood, and Crypto.com, have rolled out sports event contracts across the United States, in some cases in jurisdictions that have not legalized sports betting. Kalshi recently added parlay-style markets, while Robinhood announced it will launch football prediction contracts via its Predictions Hub in partnership with Kalshi.

The sector has also drawn legal challenges. The Ho-Chunk Nation of Wisconsin filed a federal lawsuit against Kalshi and Robinhood, alleging violations of the Indian Gaming Regulatory Act and accusing them of racketeering.

The commissions stressed the need to avoid regulatory gaps. “The SEC and CFTC must coordinate to ensure there is not a regulatory ‘no man’s land’ due to inaction by one or both agencies,” they said. “It is a new day at the SEC and the CFTC, and today we reaffirm the need to ensure regulation does not stand in the way of progress.”

The Sept. 29 session follows repeated delays. The CFTC had pledged to hold a prediction market roundtable in the spring but canceled an April date, frustrating industry participants. The agency has since received more than 40 submissions from stakeholders, including state regulators, sports leagues, tribes, and lawmakers.

Former CFTC Commissioner Kristin Johnson underscored the urgency before stepping down this month, saying the United States has “too few guardrails and too little visibility into the prediction market landscape.”

The CFTC is currently led by Acting Chair Caroline Pham, the sole sitting commissioner, pending confirmation of a permanent successor.