Key Moments:
- The joint SEC and CFTC roundtable did not address prediction markets or event contracts in its official statement.
- Panelists from Kalshi and Polymarket were present, but the discussion centered on digital assets, blockchain, and regulatory harmonization.
- The CFTC is considering new leadership as it faces an expanded role under the proposed Digital Asset Market Clarity Act 2025.
Prediction Markets Remain in the Shadows
The recent joint roundtable hosted by the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), anticipated for its approach to regulatory harmonization, steered clear of directly addressing prediction markets. Despite the presence of Kalshi and Polymarket’s founders—both leaders in the prediction market space—the official event statement omitted any mention of prediction markets, sports event contracts, or event-based trading products. Regulatory focus instead gravitated toward blockchain technology, artificial intelligence, decentralized finance, and most notably, digital assets, described by SEC Chair Paul Atkins as the agencies’ primary concern.
“We’re 54 minutes into this, and I’m still not sure why Kalshi and Polymarket were invited to this panel. (Other than to legitimize event contracts as financial instruments, and to foreshadow the jurisdictional fight over security-based event contracts.)” — Andrew Kim (@akhoya87), September 29, 2025
This absence of attention to prediction markets comes amidst ongoing legal disputes and policy discussions in the United States. Kalshi operates under CFTC regulation as a designated contract market, while Polymarket has previously faced enforcement actions. Although their inclusion on the roundtable panel was seen by many as symbolic progress, the lack of direct reference to prediction markets has left the sector’s regulatory status unchanged and unclear.
Symbolism Trumps Substantive Progress
The session featuring Kalshi co-founder Tarek Mansour and Polymarket’s Shayne Coplan drew notice within the industry, but did not engage with the regulatory uncertainty surrounding sports event contracts. Instead, regulators and market leaders spoke about “innovation exemptions,” concerns with overlapping oversight, and efforts to support competition without causing innovation to leave US shores.
Two years ago, we sued the CFTC.
Today, I have the privilege of speaking at the SEC-CFTC roundtable.
We went from fighting for prediction markets’ right to exist to being included in this dialogue amongst industry giants.
What a wild and humbling journey. https://t.co/Kdo5QC8gLr
— Tarek Mansour (@mansourtarek_) September 29, 2025
Discussion emphasized the importance of regulatory coordination to prevent gaps and arbitrage between SEC and CFTC jurisdictions, highlighting digital assets, perpetual futures, and around-the-clock trading as areas requiring integrated oversight. The session reinforced the need for greater alignment between the two agencies to avoid previous regulatory disputes.
Mansour and Coplan both noted that their participation in the roundtable itself signaled progress. Coplan addressed his history with regulators in a light-hearted manner, while Mansour called for equal conditions in the market. “It is really inspiring to see how far we’ve come in having regulators willing to have us here,” Mansour said.
Industry Reservations and Regulatory Focus
CME Group CEO Terrence Duffy voiced concerns about innovation exemptions, warning that they could result in regulatory inconsistencies. While these remarks found an audience among industry stakeholders, the ongoing lack of attention to event-based contracts highlighted an apparent reluctance by regulators to tackle contentious issues in prediction markets.
“Today, we hosted a joint roundtable with @CFTC on regulatory harmonization. I look forward to working with my counterparts across the Administration to ensure the SEC and CFTC operate side by side so that American innovation and investment can thrive.” — Paul Atkins (@SECPaulSAtkins), September 29, 2025
Throughout the session, digital assets featured prominently as agency leaders pinpointed crypto oversight as the central issue for regulatory alignment. The SEC chairman pointed to the need for a unified regulatory approach to support the ongoing development of financial technologies in the United States. Meanwhile, legislative efforts—a pending bill in Congress to delineate responsibilities for digital assets between the SEC and CFTC—were identified as potentially significant for market structure.
Former CFTC officials and analysts cautioned that omitting prediction markets from the agenda could perpetuate regulatory ambiguities, potentially motivating platforms to pursue offshore operations or operate in unregulated territory.
Fragmented Oversight and Evolving Markets
Prediction markets and event contracts were reportedly slated for discussion at the roundtable, reflecting broader concerns about fragmented oversight as derivatives continue to evolve. In a joint statement released September 5, the agencies highlighted the uncertain and inconsistent regulation of “novel products,” implicitly referencing event contracts and cryptocurrency trading offered by companies such as Kalshi, Crypto.com, and Robinhood, including those made available in jurisdictions without legalized sports betting.
Company | Regulatory Status | Product Focus |
---|---|---|
Kalshi | CFTC Designated Contract Market | Event Contracts/Prediction Markets |
Polymarket | Prior Enforcement Scrutiny | Prediction Markets |
Crypto.com, Robinhood | Not Explicitly Named | Cryptocurrency Event Contracts |
Leadership Transition at CFTC and Legislative Developments
Leadership at the CFTC is in flux following a delay in Brian Quintenz’s nomination, with attorney Josh Sterling, who represents Kalshi, reportedly seeking the chair role. Currently, Acting Chair Caroline Pham, a Trump appointee, leads as the sole commissioner but has indicated her intention to step down once a full-time replacement is confirmed.
This leadership uncertainty coincides with the CFTC’s potential increase in jurisdiction. The Digital Asset Market Clarity Act, which recently received broad bipartisan support in the House, seeks to empower the CFTC to regulate non-security digital assets such as Bitcoin and Ether. The corresponding bill in the Senate, however, remains under committee review.
The Digital Asset Market Clarity Act 2025 is designed to clarify oversight of digital commodities through the CFTC, establish standards for blockchain maturity, exempt qualifying assets from SEC registration, and enforce anti-money laundering requirements.
- Author
Daniel Williams
