The Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) will convene a joint roundtable on 29 September, with event contracts and prediction markets at the top of the agenda. The move comes amid growing concerns over fragmented oversight and the rapid evolution of derivatives markets.
In a joint statement issued 5 September, the agencies warned that “novel products” are clouded by legal uncertainty and inconsistent regulation. The statement, while not explicitly naming companies, appears to reference emerging markets such as cryptocurrency trading and event contracts offered by operators like Kalshi, Crypto.com, and Robinhood, including those available in US states that have not legalised sports betting.
Event contracts under scrutiny
The commissions made clear that event contracts—markets allowing users to trade on the outcome of real-world events—will be a key priority at the roundtable. “Prediction markets, while they have existed around the world for decades, are undergoing rapid growth with growing demand from both market operators and the public,” the agencies noted. “We should work together to provide clarity for innovators that want to list event contracts responsibly, including those based on securities.”
Both regulators emphasised the need to prevent a regulatory “no man’s land” where uncertainty discourages innovation. “It is a new day at the SEC and the CFTC, and today we reaffirm the need to ensure regulation does not stand in the way of progress,” the statement continued.
While prediction markets will draw industry attention, the September 29 roundtable will also examine the potential expansion of 24/7 markets, portfolio margining across asset classes, and the use of innovation exemptions to foster new financial products. It remains unclear which stakeholders will be invited to participate in the discussions.
Industry pressure builds
The roundtable comes after repeated delays. The CFTC first promised a prediction markets roundtable in early February, only to cancel a planned spring session in April. The CFTC roundtable was scheduled for 30 April 2025, which was cancelled without the authority confirming or denying this meeting or its cancellation. However, according to multiple media reports, a meeting was indeed scheduled. According to Dustin Gouker’s The Closing Line, the meeting was cancelled (not postponed). In the meantime, market innovation has outpaced regulatory action.
Notably, Kalshi recently expanded its sports event offerings, introducing parlay-style contracts to complement its earlier prop-style markets, moves that have drawn sharp regulatory interest. This comes despite legal pressures mounting on the prediction market platform, with the most recetn lawsuit by The Ho-Chunk Nation of Wisconsin. The tribe has sued Kalshi and Robinhood, accusing the companies of violating the Indian Gaming Regulatory Act (IGRA) and engaging in racketeering and corruption. The federal lawsuit, filed in the Western District of Wisconsin, marks the latest legal challenge to the offering of sports-related event contracts by non-tribal entities on or near tribal lands.
Similar to Kalshi, Robinhood has also announced that it will start offering football prediction markets directly within its stock-trading app. In a press release, Robinhood stated that football prediction markets will be live “in the coming days” via its Predictions Hub. The new service, offered through Robinhood Derivatives in partnership with event-trading platform Kalshi, will allow users to trade contracts on the outcomes of both professional and Power Four college football games, including independents.
Urgency of regulatory intervention
Former CFTC Commissioner Kristin Johnson, in her farewell speech last month, highlighted the urgency of regulatory intervention. She warned that the US has “too few guardrails and too little visibility into the prediction market landscape,” calling for more robust oversight. The commission has been without a chair since January 2025, when Rostin Behnam announced that he would be stepping down. Currently, the CFTC is being led by Acting Chair Caroline Pham, a Trump-appointed Republican. However, Pham has stated she intends to step down once her permanent successor is confirmed.
Currently, the CFTC has received more than 40 written submissions on prediction markets from a wide array of stakeholders, including gaming regulators, major sports leagues, tribal nations, and lawmakers. This includes the Tennessee Sports Wagering Council (TSWC), the agency responsible for monitoring sports betting in Tennessee, which wrote a letter to the CFTC in April. The TSWC essentially told the trading commission that it believes that the sports event contracts being offered violate the state’s law. For the gaming and fintech industries, the long-awaited roundtable represents the first tangible step toward regulatory harmonisation between the SEC and CFTC.
