Digital Chamber Establishes Task Force to Pursue Prediction Market Regulatory Framework
A newly formed Prediction Markets Working Group by The Digital Chamber aims to promote industry standards and push for continued CFTC primary regulatory authority.
The Digital Chamber, a prominent blockchain advocacy organization, has established a specialized division dedicated to advancing prediction markets and securing regulatory framework clarification for the industry across the United States.
Through a Tuesday announcement posted on X, The Digital Chamber revealed the formation of the Prediction Markets Working Group, detailing an extensive multi-year strategy aimed at providing transparency to what the organization characterized as a "misunderstood segment of finance."
According to The Digital Chamber, their initial step involved delivering correspondence to Commodity Futures Trading Commission (CFTC) chairman Mike Selig, commending his work to preserve federal authority over prediction markets while simultaneously urging an end to enforcement-driven regulation.
"In our letter, we applauded Chair Selig's recent statements regarding the intent for CFTC staff to provide tailored rulemaking and guidance for this rapidly growing segment of the financial and digital asset industries," The Digital Chamber said.
"For too long, operators in this space have navigated a maze of regulatory ambiguity including unclear overlaps between federal and state regulators," it added.
Looking ahead, the organization intends to maintain ongoing dialogue with the CFTC, craft guiding policy principles, deliver policy suggestions, release comprehensive research and establish an alliance of industry stakeholders and active participants.
The group also referenced "participating in litigation" through amicus curiae submissions designed to inform judicial bodies about what it considers the "CFTC's historic regulatory exclusivity" over the industry.
Prediction markets are heading to court
This development arrives during a period of heightened examination of the industry from state-level governments and regulatory authorities.
On Tuesday, Kalshi, among the most prominent prediction market platforms, received a civil enforcement action from the Nevada Gaming Control Board. The regulatory body is seeking an injunction to prevent Kalshi from providing "unlicensed wagering" within the state's borders.
Kalshi and its rival Polymarket have both encountered numerous state regulators attempting to prohibit them from providing markets including sports contracts within their jurisdictions, with authorities contending they are delivering unlicensed gambling services.
During the previous week, Polymarket initiated a federal lawsuit against the state of Massachusetts as a preemptive measure to prevent any prospective enforcement action, maintaining that the CFTC holds primary regulatory responsibility over the industry, not individual state governments.
The CFTC chair has similarly been voicing comparable views in recent times, calling on state governments to honor the CFTC's jurisdiction and regulatory control over the sector or potentially encounter them in legal proceedings.
"Prediction markets aren't new — the CFTC has regulated these markets for over two decades," Selig emphasized in a video posted to X on Monday.
In response to Selig on Tuesday, Utah Governor Spencer Cox expressed willingness regarding potential legal confrontations with the CFTC, characterizing prediction markets as gambling that is "destroying the lives" of Americans.
"Mike, I appreciate you attempting this with a straight face, but I don't remember the CFTC having authority over the 'derivative market' of LeBron James rebounds. These prediction markets you are breathlessly defending are gambling—pure and simple."