Conservative Leaders Urge CFTC to Embrace Prediction Markets Innovation
A coalition of conservative leaders is pushing the CFTC to greenlight prediction markets, arguing they’re key to smarter forecasting and economic freedom.
A Call for Change at CFTC
A group of conservative and free-market leaders, including Grover Norquist of Americans for Tax Reform and John Berlau of the Competitive Enterprise Institute, sent a letter to CFTC Acting Chair Caroline Pham and Commissioner Kristin Johnson.
The letter, addressed to the agency’s Washington, D.C., headquarters, demands a policy shift toward “permissionless innovation” for prediction markets.
It slams the Biden-era CFTC for “weaponized regulation” that tried to ban election betting platforms, moves later blocked by federal courts. The group wants a clear CFTC policy statement affirming these markets’ legality under federal law.
The leaders highlight prediction markets’ knack for outshining traditional polls, pointing to their accurate calls in the 2024 presidential election while legacy media fumbled.
These platforms, like Kalshi and Crypto.com, let users bet on outcomes from elections to sports, offering real-time insights into political, cultural, and economic trends.
Unlike casinos, where the house tilts odds, prediction markets set prices through open buying and selling, making them a purer reflection of sentiment.
The letter cites CFTC chair nominee Brian Quintenz, who argues these contracts are “almost always permissible” under the Commodity Exchange Act.
Economic and Hedging Benefits
The coalition stresses that prediction markets aren’t just for speculators. Small businesses, they argue, can use them to hedge against risks tied to election results or sports outcomes, much like big firms use complex derivatives.
Quintenz has noted that sports event contracts hold “legitimate economic and hedging purpose” for companies.
The letter rips into the Biden CFTC’s attempts to shut down election betting, calling it an overreach that stifled innovation. Despite court rulings favoring platforms like Kalshi, which won a 2024 case to offer election contracts, the leaders say the damage lingers.
The group wants the CFTC to police fraud but not limit what markets can cover, from politics to sports. The leaders urge the CFTC to issue a policy statement declaring prediction markets under its sole jurisdiction and pledging not to restrict their subject matter.
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