U.S. SEC Chair: Prediction markets are a "huge issue," with legal attention continuing to rise

PANews February 13 News, according to The Block, U.S. Securities and Exchange Commission (SEC) Chairman Paul Atkins stated at a Senate Banking Committee hearing that prediction markets are a "significant issue" and a regulatory focus he shares with Commodity Futures Trading Commission (CFTC) Chairman Michael Selig. Atkins pointed out that prediction markets have "potential jurisdictional overlaps," currently mainly under CFTC jurisdiction, but the two agencies will work collaboratively. When asked whether clear rules will be established, he said "we'll see," and noted that "securities are securities, and the definition of prediction markets and their products depends on specific wording." CFTC Chairman Selig said he will ensure that "reasonable rules and protections" are established for prediction markets to prevent them from being pushed overseas.

The regulatory authority over prediction markets has become a contentious issue between federal and state governments. Operators argue that under the Commodity Exchange Act, all event contracts should be exclusively under CFTC jurisdiction; meanwhile, some states believe that related platforms involve activities like sports betting, which violate local gambling laws. Recently, prediction markets have also attracted additional attention due to insider trading allegations and restrictive legislation targeting political betting.