The Digital Chamber, a prominent blockchain advocacy group, has introduced a new division dedicated to supporting prediction markets and working toward regulatory clarity for the industry in the United States. This initiative was announced on X, where the organization revealed the establishment of the Prediction Markets Working Group. The group outlined a long-term strategy aimed at addressing what it describes as a “misunderstood segment of finance.”
In its announcement, the Digital Chamber emphasized that the first step in this effort was sending a letter to Mike Selig, the chairman of the Commodity Futures Trading Commission (CFTC). The letter commended Selig’s efforts to maintain federal jurisdiction over prediction markets and urged an end to regulatory actions by enforcement agencies.
“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 stated. “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 group plans to continue engaging with the CFTC, develop policy principles, submit policy recommendations, publish research, and build a coalition of industry stakeholders and participants. It also mentioned participating in litigation through friend-of-the-court briefings to educate courts on what it considers the “CFTC’s historic regulatory exclusivity” over the sector.
Prediction markets are heading to court
This development comes amid heightened scrutiny of the sector from state governments and regulators. Kalshi, one of the leading prediction market platforms, recently faced a civil enforcement action from the Nevada Gaming Control Board. The board is seeking an injunction to halt Kalshi from offering “unlicensed wagering” in the state.
Both Kalshi and its competitor Polymarket have encountered multiple attempts by state regulators to stop them from offering markets such as sports contracts within their states. These regulators argue that the platforms are providing unlicensed gambling products.
Last week, Polymarket filed a federal lawsuit against the state of Massachusetts to prevent any potential enforcement actions. The company claims that the CFTC has primary oversight over the sector, not state governments.
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The CFTC chair has also echoed these sentiments, urging state governments to respect the CFTC’s authority and oversight over the sector or risk facing legal consequences. “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’s comments, Utah Governor Spencer Cox welcomed the possibility of legal battles with the CFTC. He labeled prediction markets as a form of gambling, stating that they are “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.”
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