Release Number 9046-25
CFTC Announces Prediction Markets Roundtable
February 05, 2025
WASHINGTON, D.C. — The Commodity Futures Trading Commission will hold a public roundtable in approximately 45 days at the conclusion of its requests for information on certain sports-related event contracts. 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. The roundtable will be held in the Conference Center at the CFTC's headquarters at Three Lafayette Centre, 1155 21st Street N.W., Washington, D.C. Further information on the roundtable will be released once details are finalized.“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. The roundtable will include the above topics, in addition to retail binary options fraud and customer protection, potential revisions to Part 38 and Part 40 of CFTC regulations to address prediction markets, and other improvements to the regulation of event contracts to facilitate innovation. Participants will include a wide variety of experts and stakeholders representing numerous and diverse interests in these issues. Members of the public may provide feedback, suggestions, and requests to participate as panelists on the roundtable by February 21, 2025 via email to [email protected] with “Prediction Markets Roundtable” in the subject field.
-CFTC-
