• The US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) will hold a joint roundtable on 29 September to address the chaotic regulation of prediction markets.
• The move is a long-awaited step to provide “clarity” for a sector currently caught in a “regulatory no man’s land” between federal commodities law and state gambling laws.
• The announcement comes as platforms like Kalshi and Robinhood are aggressively expanding their sports-related offerings, triggering a wave of lawsuits from state and tribal regulators.
• The agencies have received over 40 written submissions from stakeholders, including sports leagues, gaming regulators, and tribal nations, highlighting the contentious nature of the issue.
• The summit is seen as the first tangible step towards creating a coherent federal framework for the rapidly growing event contracts industry.

In a highly anticipated move, the United States’ two most powerful financial regulators, the SEC and the CFTC, have announced they will convene a joint public roundtable on 29 September to finally address the regulatory chaos surrounding prediction markets and event contracts.

In a joint statement, the agencies acknowledged that “novel products” are currently clouded by legal uncertainty and inconsistent oversight. They stressed the need to work together to “provide clarity for innovators” and prevent a “regulatory no man’s land where uncertainty discourages innovation.” The announcement is the first formal, collaborative step by the top federal regulators to get a grip on the rapidly evolving sector.

A Response to Market Chaos

The summit comes after months of industry pressure and amid an escalating series of legal battles across the country. The current situation is widely seen as untenable, with the prediction market platform Kalshi and its distribution partner Robinhood at the centre of the storm.

The two firms are aggressively expanding their sports-related offerings-which functionally mirror traditional sports bets-under their CFTC-regulated framework. This has triggered a fierce backlash from a coalition of state gambling regulators and tribal gaming authorities, who argue the products are a form of illegal sports betting. A flurry of lawsuits has ensued, with the Ho-Chunk Nation of Wisconsin being the latest tribe to sue Kalshi and Robinhood, while the companies themselves are suing states like New Jersey and Nevada.

Overwhelming Stakeholder Interest

The high-stakes nature of this jurisdictional battle is highlighted by the immense interest from stakeholders. The CFTC has confirmed it has already received more than 40 written submissions on the topic from a diverse and often conflicting group of interested parties, including:

• Major US sports leagues.
• State gaming regulators, such as the Tennessee Sports Wagering Council.
• Tribal nations.
• Lawmakers from both sides of the aisle.

The First Step Towards Clarity?

For the entire prediction market and wider US wagering industry, this long-delayed roundtable is a critical development. It marks the first time the SEC and CFTC are formally coming together to try and harmonise their approach to this new and disruptive product category.

While the event is only a discussion, its outcome could lay the groundwork for a future federal framework that could either legitimise and provide a clear path forward for the prediction market industry, or side with state gaming regulators and dramatically curtail its operations. The industry will be watching the 29 September meeting with intense interest.