Senators Push Back Against CFTC Over Prediction Market Expansion

Congress sees a bipartisan push to question the Commodity Futures Trading Commission’s (CFTC) approach to the growth of prediction markets offering sports-related contracts.

Draft Letter Slams CFTC for Giving Green Light to Nationwide Sports Wagering Products

Democrat Catherine Cortez Masto from Nevada and Republican John Curtis from Utah are getting signatures for a draft letter. They plan to send this letter to Caroline Pham, the acting CFTC Chair and the agency’s only commissioner right now. The letter expresses worry that the CFTC has allowed companies to market sports betting as regulated “event contracts.”

The draft letter shows the senators argue that the CFTC’s approach undermines the rules Congress set when it banned gaming contracts at the federal level. They say the agency has allowed companies to sell nationwide sports betting as financial products even though states and tribes control sports wagering.

The letter gives examples of companies saying they can help people bet in all 50 states. Lawmakers claim these statements go against both the wording and the meaning of current law. The draft goes on to say that by not stepping in, the CFTC risks weakening the power of states and tribes to control gambling within their borders, an authority the Supreme Court has said belongs to them.

Lawmakers Challenge CFTC as Sports Contracts Seem to Dodge State Laws

This challenge happens as prediction markets face closer looks from the wider gaming world. Platforms like Kalshi have self-certified sports event contracts with the CFTC before big sports events like the Super Bowl. Critics say these contracts are the same as regular sports bets but do not have the safety measures that state-licensed operators must follow, such as age checks, responsible gaming safeguards, and regulatory checks.

People who speak for the industry and tribal regulators have often said they are worried that federal oversight could push aside local laws and weaken hard-earned regulatory rules. The senators’ draft shows these same concerns, warning that if the CFTC does not act, it could turn gambling policy into a federal issue, an area that states and sovereign tribal governments have handled.

The CFTC’s regulations do not address sports events, which allows operators to label their products as event contracts on their own. This has led to arguments about whether these offerings count as allowed financial tools or banned gambling activities. Right now, the senators are pushing the agency to make its stance clear. Their draft states that the Commission cannot refuse to enforce congressional bans just by calling bets event contracts. If the letter goes through, it would put more pressure on the CFTC to explain its position and change how prediction markets work across the country.