Advocacy Groups Challenge CFTC Plan to Greenlight Prediction Markets

The dispute centers on whether platforms allowing users to bet on outcomes—ranging from sports events to political speeches—should be regulated as legitimate financial tools or as high-risk gambling operations. While the Trump administration and CFTC Chair Michael Selig maintain that these platforms fall under the agency’s exclusive regulatory authority, opponents contend this framing ignores the reality of the business model. Demand Progress Education Fund and ten other organizations argue that reclassifying sports wagers as event contracts does nothing to mitigate the social risks associated with unrestricted speculation.

The coalition points to Kalshi’s own data, noting that 89% of its fee revenue stems from sports-related contracts. They warn that the agency’s proposal would essentially grant these platforms an escape from mandatory gaming disclosures and financial stability requirements. Beyond the threat of increased personal bankruptcies and domestic violence, the groups highlight a significant lack of institutional capacity at the CFTC. With a budget frozen at $365 million, the agency is tasked with overseeing $400 trillion in established derivatives markets, a mission critics say would be dangerously diluted by adding the oversight of massive, 24/7 consumer betting operations.