SEC-CFTC Roundtable: Kalshi, Polymarket Make Waves, Duffy Pushes for Fairness
Prediction market innovators Kalshi and Polymarket made waves at an SEC-CFTC joint roundtable, with CME Group chairman Terry Duffy pushing for regulatory fairness and acknowledging the energy they bring to the stock market industry. The event focused on regulatory harmonization efforts between the two agencies.
Duffy, an incumbent in the stock market, praised the energy and innovation brought by prediction markets, sharing a personal anecdote about using Kalshi. He also acknowledged CME's joint venture with FanDuel, hinting at potential sports betting involvement despite no official announcement. Duffy questioned why innovation exemptions exist for similar products, advocating for a level playing field between incumbents and innovators.
Kalshi and Polymarket, represented by their CEOs Shayne Coplan and Tarek Mansour respectively, favor the CFTC's self-certification process. This allows them to list new products in just 24 hours, without agency objection. Kalshi, with around 2,000 markets expected this stock market today, supports this process to cater to retail investor demand. Duffy recalled a six-year wait for an SEC application, contrasting it with the CFTC's swift process.
Duffy mentioned high fees on Kalshi as a growing complaint from the sports betting crowd. A day after the roundtable, the CFTC publicly acknowledged sports prediction markets for the first time, warning participants of potential legal and regulatory action by states.
The SEC-CFTC roundtable highlighted the growing influence of prediction markets, with Kalshi and Polymarket at the forefront. While Duffy raised concerns about fees and regulatory fairness, the CFTC's acknowledgment of sports prediction markets signals a shift in the industry's landscape. The future of these markets remains uncertain, with potential legal and regulatory challenges ahead.
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