(Bloomberg) - Wall Street’s main derivatives regulator will write new rules for the multi-billion dollar prediction markets industry, the head of the Commodity Futures Trading Commission said Thursday.
“It is time for clear rules and a clear understanding that the CFTC supports lawful innovation in these markets,” Chairman Michael Selig said in prepared remarks. “Consistent with my commitment to fostering responsible innovation in crypto asset markets, I will continue to support the responsible development of event contract markets.”
Prediction market platforms like Polymarket and Kalshi Inc. allow customers to buy yes-or-no positions on a wide range of future events, from whether the US government will shut down on Saturday to which movie will win the Oscar for best picture. Trading activity on prediction market platforms has surged, despite opposition from some state gaming regulators.
The agency in 2024 under then Chairman Rostin Behnam issued a proposal that called for banning sports and politics-related wagers on prediction markets. Selig said Thursday he’d formally withdraw that plan as well as a 2025 staff advisory that cautioned businesses from offering sports-related contracts due to ongoing litigation.
“While the advisory was issued at the staff level with the intent of bringing awareness to the litigation, it has instead contributed to uncertainty in our markets,” he said.
Selig became the head of the regulator in December. He made the announcement at a panel on cryptocurrency regulation and coordination with Securities and Exchange Commission Chairman Paul Atkins.
By Nicola M White
