The U.S. Commodity Futures Trading Commission (CFTC) is set to hold a public roundtable to evaluate its regulatory stance on prediction markets, which could impact platforms like Kalshi and Polymarket. This review follows the agency's earlier request for comments on sports-related event contracts and aims to gather insights from market participants and legal experts. Concerns will be discussed regarding consumer protection and the legality of event contracts under the Commodity Exchange Act. Acting Chairman Caroline D. Pham criticized the CFTC's past regulatory framework as a 'sinkhole of legal uncertainty,' which has stifled innovation. Notably, Kalshi has faced regulatory hurdles, while Polymarket was fined for offering unregistered swaps. Pham emphasized the need for a proactive regulatory approach to enhance consumer protection. During the past presidential election cycle, Polymarket gained prominence for tracking the likelihood of candidates' success, illustrating its potential role in gauging public sentiment. The roundtable will offer a platform for discussions on future regulatory strategies, with public comments due by February 21, 2025.

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