The Commodity Futures Trading Commission (CFTC) has cancelled its roundtable regarding the future of prediction markets and sports event contracts.
As per ex-Catena Media’s Dustin Gouker’s newsletter Event Horizon, US the derivatives market regulator has scrapped plans to hold talks on the burgeoning sector, despite the roundtable believed to be pencilled in for 30 April.
Attendees have not been updated on when the event, which was never formally announced, will be rescheduled, nor the reasons behind the cancellation.
According to Event Horizon, several representatives of state regulators, gaming companies and sports leagues had originally been invited to contribute.
The CFTC announced that it would hold a public roundtable around 45 days from 21 February, designed to inform its approach on how to regulate a sector that the authority described as an “important new frontier”.
At the time of the CFTC’s update, acting chair Caroline Pham blasted the conduct of the previous Biden administration and its stance on prediction markets.
“Unfortunately, the undue delay and anti-innovation policies of the past several years have severely restricted the CFTC’s ability to pivot to commonsense regulation of prediction markets,” Pham explained.
She added: “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.”
Since early February, the CFTC has been accepting public comments from multiple industry stakeholders on how prediction markets platforms should be regulated amid the rise in popularity of sports event contracts in the US, offered by the likes of Kalshi, Robinhood and Crypto.com.
However, the decision to cancel the roundtable comes as scrutiny on the sector continues to rise, with Kalshi the subject of six cease-and-desist letters from an array of state-level regulators.
In response, the New York-based exchange has filed three separate lawsuits against the Nevada Gaming Control Board (NGCB), New Jersey’s Division of Gaming Enforcement (DGE) and the Maryland Lottery and Gaming Control Commission (MLGCC).
All three of the state-level authorities have argued that Kalshi’s offering is effectively unauthorised sports betting, given the contracts are traded based on a user’s prediction of certain game outcomes.
Kalshi responded by claiming that given it is regulated at federal level by the CFTC, state regulators do not possess the authority to halt its sports event contracts, and to do so would be in violation of federal law.
The operator also outlined that its peer-to-peer swaps model is separate from the traditional sportsbook model of a user betting against the house.
In all three suits, Kalshi has requested temporary restraining orders (TRO) and preliminary injunctions to ensure the regulators cannot prevent sports event contracts until further clarity is offered by the CFTC.
As detailed in one suits, Kalshi’s lawyers stated: “In contrast to the action it took with regard to congressional control contracts, the CFTC declined to review Kalshi’s sports-related contracts.
“Unless and until the CFTC takes action on Kalshi’s sports-related contracts, they remain authorised under federal law.”
The post Report: CFTC scraps prediction markets roundtable first appeared on EGR Intel.
Federal agency is reported to have cancelled the discussion regarding how to regulate sports event contracts just six days before it was scheduled
The post Report: CFTC scraps prediction markets roundtable first appeared on EGR Intel.