Digital Chamber Forms Prediction‑Markets Working Group to Push for Regulatory Certainty
The newly created unit will coordinate outreach with the CFTC, draft policy guidance and mobilise industry players as state‑level scrutiny of prediction‑market platforms intensifies.
WASHINGTON, Feb. 18 — The blockchain advocacy organisation The Digital Chamber announced the formation of a dedicated Prediction‑Markets Working Group on Tuesday, outlining a multi‑year strategy aimed at clearing the regulatory fog that has long shrouded the sector in the United States.
In a brief posted on X, the group said its first move was to send a letter to Commodity Futures Trading Commission (CFTC) Chairman Mike Selig. The correspondence praised the chair’s recent remarks that CFTC staff would develop specialised rulemaking and guidance for prediction‑market activities, while also urging the agency to halt any ad‑hoc enforcement actions that have left operators uncertain about their legal standing.
“For too long, participants have been forced to navigate a maze of overlapping federal and state rules,” the letter read, according to the announcement.
What the Working Group Plans to Do
The Digital Chamber’s roadmap includes several coordinated actions:
- Ongoing dialogue with the CFTC – regular meetings and formal comments on forthcoming rule proposals.
- Development of policy principles – a framework intended to inform future regulations and industry best practices.
- Submission of concrete recommendations – white‑papers and position statements that will be circulated among regulators and legislators.
- Research and public‑education efforts – reports that dissect the economic and consumer‑protection aspects of prediction markets.
- Coalition‑building – bringing together exchanges, data providers, legal firms and other stakeholders to present a unified voice.
- Legal advocacy – filing amicus curiae briefs in key court cases to underscore the CFTC’s historic exclusive authority over the space.
The Broader Regulatory Landscape
The launch comes at a moment when state regulators are stepping up enforcement against platforms that allow users to trade on the outcomes of real‑world events.
- Nevada – The Nevada Gaming Control Board filed a civil enforcement action against Kalshi, alleging that the exchange offers unlicensed wagering and seeking an injunction to stop such activity in the state.
- Other states – Both Kalshi and Polymarket have faced orders from Tennessee and other jurisdictions demanding they halt sports‑related contracts, which regulators label as illegal gambling.
- Federal litigation – Last week Polymarket filed a lawsuit against Massachusetts, arguing that the state lacks the authority to regulate prediction markets because the CFTC holds primary oversight.
CFTC Chair Selig has repeatedly underscored the agency’s long‑standing jurisdiction, noting that the commission has supervised these markets for more than twenty years. In a video posted to X, he warned that state officials who ignore the CFTC’s mandate could find themselves in court battles.
Governor Spencer Cox of Utah responded to Selig’s remarks, characterising prediction markets as a form of gambling that “destroys lives,” and expressing openness to legal challenges against the CFTC’s claim of authority.
Industry Implications
The Working Group’s emergence signals a more organized push from the crypto‑and‑fintech sectors to secure a clear federal framework. If successful, the effort could:
- Reduce compliance costs – Clearer rules would allow platforms to standardise their operations across states rather than tailoring products to a patchwork of local statutes.
- Encourage investment – Institutional capital may be more willing to allocate resources to prediction‑market ventures if regulatory risk is mitigated.
- Shape the future of hedging – With guidance from the CFTC, prediction markets could evolve into widely accepted risk‑management tools, echoing calls from prominent figures in the crypto community.
Conversely, unresolved friction between federal and state jurisdictions could prolong litigation, limiting market growth and possibly prompting some operators to relocate outside the United States.
Key Takeaways
- The Digital Chamber’s new Working Group seeks to engage the CFTC directly, develop policy guidance, and build an industry coalition.
- State regulators, notably in Nevada and Tennessee, are intensifying enforcement against platforms such as Kalshi and Polymarket.
- The CFTC maintains that it has exclusive authority over prediction markets, a stance that is being tested in courts and through state‑level actions.
- If the Working Group succeeds, the sector could benefit from reduced legal uncertainty, lower compliance burdens, and greater institutional participation.
- The ongoing tug‑of‑war between federal and state oversight may continue to generate litigation, influencing the pace at which the market matures.
The coming months will reveal whether coordinated advocacy can translate into concrete regulatory reforms, or whether the conflict between federal and state authorities will keep the prediction‑market space in a state of legal limbo.
Source: https://cointelegraph.com/news/the-digital-chamber-launches-prediction-market-working-group?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
