Earlier this year, the Commodity Futures Trading Commission (CFTC) issued an Advance Notice of Proposed Rulemaking (ANPRM) on prediction markets as part of Chairman Selig’s aim of promoting responsible innovation in derivatives markets. The CFTC has overseen these markets for more than two decades, but this ANPRM signals a reinvigorated commitment to getting the regulatory framework for prediction markets right.
This effort comes at a critical time. Prediction markets are experiencing unprecedented growth: From September to March of this year, Kalshi’s average weekly trading volume surged by a factor of 10, from $300 million to $3 billion. And their potential extends well beyond the markets that exist today. We applaud the CFTC for taking this important step.
To support this goal, we submitted a comment letter providing input on the application of statutory core principles and Commission regulations to prediction markets, public interest considerations relevant to event contracts, and other key issues.
Why getting the rules right now matters
Markets are one of the most powerful tools for information aggregation and analysis, distilling immense amounts of data into actionable information. Prediction markets are a direct extension of this principle. As the potential applications of prediction markets continue to expand, the case for resolving these issues correctly will only get stronger.
