CFTC to Host Public Roundtable on Prediction Markets and Event Contract Regulations

The Commodity Futures Trading Commission (CFTC) has announced plans to convene a public roundtable in approximately 45 days at its Washington, D.C. headquarters. The event, scheduled to take place following the conclusion of its requests for information on sports-related event contracts, aims to establish a comprehensive administrative record to guide future regulation and oversight of prediction markets. The regulatory agency stated that the roundtable will gather data, studies, expert testimony, and public input from various stakeholder groups. The initiative is intended to inform the CFTC's supervisory approach to event contracts while addressing retail customer risks, including deceptive marketing practices and binary options fraud. Acting Chairman Caroline D. Pham criticized past regulatory delays, emphasizing the need for a modernized framework. Pham noted that previous policies and Commission interpretations regarding event contracts created legal uncertainty and constrained innovation. She highlighted that following the Administrative Procedure Act and building an administrative record is essential for the CFTC to pivot toward balanced oversight that supports market development while safeguarding retail investors. The discussions will cover several core regulatory challenges and legal matters currently facing the prediction markets sector. Key focus areas include existing Commission orders and interpretations under Regulation 40.11, designated contract market (DCM) and futures commission merchant (FCM) regulations, federal court rulings regarding gaming definitions, and ongoing litigation. The roundtable will also examine broader legal considerations, such as federal preemption, state regulatory frameworks, tribal sovereignty, and potential revisions to Part 38 and Part 40 of CFTC rules. The CFTC confirmed that members of the public, market participants, and prospective panelists may submit suggestions and requests to participate until February 21, 2025.