The Digital Chamber of Commerce, a prominent cryptocurrency advocacy group, has officially formed the Prediction Markets Working Group. This strategic unit is tasked with securing federal regulatory clarity for the rapidly growing prediction market sector, which has been caught in a crossfire of state-level enforcement actions.
The group's primary objective is to advocate for the Commodity Futures Trading Commission (CFTC) to assume exclusive regulatory control over prediction markets. This push aims to end the current fragmentation where state gaming commissions, like the Nevada Gaming Control Board, are taking aggressive actions against platforms. A recent example cited is the civil enforcement action against prediction market platform Kalshi by Nevada regulators, who labeled its activities as "unlicensed wagering."
The working group's first official move was to send a strategic letter to CFTC Chairman Mike Selig. The letter urges the commission to pursue tailored federal rulemaking instead of regulation through litigation. The Digital Chamber praised Selig's previous stance on maintaining federal jurisdiction but demanded an end to the "maze of regulatory ambiguity" that operators currently face.
In its announcement, the Chamber outlined plans to file "friend-of-the-court" briefs to educate judges on the CFTC's historic regulatory exclusivity over such derivatives. The initiative seeks to legally define prediction markets as financial instruments rather than gambling products, a distinction that could remove a significant stigma and unlock institutional investment.
The formation of this group is a direct response to a "hostile environment" for traders, where platforms must juggle federal compliance with aggressive state-level claims of jurisdiction. Success for the working group could lead to a clear federal mandate, potentially allowing U.S.-based traders greater access to liquid markets without fear of sudden platform geo-blocking. The next significant development will be the CFTC's formal response to the Chamber's advocacy letter.
