SEC and CFTC focus on prediction market regulation

Prediction markets face increased U.S. regulatory scrutiny. The SEC and CFTC are coordinating oversight, with the SEC ready to regulate markets that resemble securities as the sector grows.

Prediction markets in the United States are facing increased regulatory attention. SEC Chair Paul Atkins recently informed the Senate Banking Committee that these markets have become a major focus for federal regulators. The rapid rise of platforms like Kalshi and Polymarket, which let users bet on outcomes from elections to economic events, has pushed the sector’s value into the tens of billions of dollars. Atkins pointed out the complex overlap between the SEC and the Commodity Futures Trading Commission (CFTC). While the CFTC has typically been the main regulator, the SEC may step in when contracts resemble securities. Both agencies are now coordinating closely, holding weekly meetings to address regulatory challenges and prevent oversight gaps. Atkins emphasized that the SEC already has sufficient authority to regulate prediction markets that function like securities, suggesting new legislation may not be needed. The agencies are working to harmonize their approach as the sector expands into areas like sports and economic indicators.