A group of Democratic lawmakers is urging the Commodity Futures Trading Commission to issue a rule that would aim to rein-in prediction markets, curb insider trading and prohibit certain types of event contracts.
In a letter first shared with CNBC and sent to the CFTC on Thursday, a group of congressional Democrats led by Jeff Merkley of Oregon., called on the federal agency to address “the rapid erosion of integrity” within prediction markets such as Kalshi and Polymarket.
“We strongly encourage you to use your authority to preserve the intent of prediction markets, and congressional intent behind the Commodity Exchange Act, by issuing a rule that prevents insider trading and corruption in the market and prohibits event contracts on the outcome of elections, war and military actions in the U.S. or abroad, sports, and government actions without a valid economic hedging interest,” the lawmakers wrote.
Sens. Richard Blumenthal of Connecticut, Chris Van Hollen of Maryland, Sheldon Whitehouse of Rhode Island and Rep. Jamie Raskin of Maryland also signed the letter.
Prediction markets have surged in popularity in the last year, drawing increased attention from lawmakers, particularly after a series of bets were placed on the platform Polymarket ahead of major world events.
