WASHINGTON, D.C.—Benjamin Schiffrin, Director of Securities Policy for Better Markets, issued the following statement in connection with CFTC Chair Mike Selig’s decision to withdraw the CFTC’s 2024 proposed event contracts rulemaking and the staff’s 2025 advisory about state regulatory actions regarding sports-related event contracts:
“Despite the risks prediction markets pose, CFTC Chair Selig seems determined to keep them unregulated. He described the CFTC’s 2024 proposed rule, which attempted to reaffirm that political event contracts are illegal, as a ‘frolic into merit regulation’ and inconsistent with Congressional intent. Nothing could be further from the truth.
“Congress gave the CFTC the authority to prohibit event contracts that involve gaming, war, terrorism, assassination, or activity unlawful under state law. The 2024 rule attempted to clarify, as then-Chair Rostin Benham said, that political event contracts ‘not only fail to serve the economic purpose of the futures market’ but are ‘illegal in several states.’ The CFTC was simply using its authority to protect our elections from prediction markets.
“The 2025 staff advisory informed registered entities that they could be subject to state regulatory actions if they offered event contracts on sports. This made sense, since prediction markets that offer event contracts on sports are nothing more than unregulated sportsbooks. Yet Chair Selig said, without citing evidence, that the staff was now withdrawing the advisory because it had created ‘confusion and uncertainty.’
“The CFTC took these actions on the same day Bloomberg reported that, according to a stock analyst, the bottom quarter of users on prediction market sites lost about 28 cents of every dollar they bet in the first three months of adoption, compared to 11 cents per dollar on other gambling sites. The report crystalizes what is already clear: prediction markets are just casinos. Bloomberg’s description of them as ‘the new wild west of online betting’ could not be more apt. Yet instead of adopting common sense rules, the CFTC is doing the opposite. The CFTC should protect the public instead of allowing these sites to proliferate.”
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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.
