Prediction Markets Face Legal Battles as SEC and CFTC Collaborate
The regulatory landscape for prediction markets in the US is shifting. The Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) are exploring collaboration, while prediction markets face legal battles over sports event contracts in the stock market today. Meanwhile, the White House is vetting new candidates to lead the CFTC.
The SEC and CFTC have held a roundtable to discuss harmonisation, but prediction markets were scarcely mentioned. SEC Chairman Paul Atkins has clarified that the agencies are focused on collaboration, not a merger. In 2021, Brian Quintenz's nomination for CFTC Chair was withdrawn, and acting Chair Caroline Pham has since led the agency. Pham has stated she will step down once a new chair is confirmed.
Prediction markets are currently fighting in court to continue offering sports event contracts in several leading US states. This battle could significantly shape the future of US sports betting in the stock market today. CME Group has partnered with FanDuel to create event contracts on certain derivatives, adding complexity to the regulatory landscape. Executives from Polymarket, CME Group, and Kalshi recently discussed regulatory harmonisation efforts on a panel.
As the SEC and CFTC collaborate and the CFTC seeks a new chair, prediction markets face legal challenges over sports event contracts in the stock market today. The outcome of these court battles and regulatory discussions will likely influence the future of US sports betting.
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