US commodities agency to issue 'events contract' regulations
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Signage is seen outside of the US Commodity Futures Trading Commission (CFTC) in Washington, D.C., U.S., August 30, 2020. REUTERS/Andrew Kelly
WASHINGTON, Jan 29 (Reuters) - The U.S. Commodity Futures Trading Commission will draft new regulations governing the burgeoning market for so-called event contracts, removing obstacles for companies that oversee wagers on politics and sports, the agency's leader said on Thursday.
Michael Selig, the CFTC's new chairman, spoke during a joint public discussion with Paul Atkins, chair of the Securities and Exchange Commission, where they also announced the two agencies would be jointly pursuing "Project Crypto," an SEC initiative to develop regulations for the digital assets industry.
WHY IT MATTERS
The agency will withdraw a prior rule proposal that would have banned such contracts. The move underscores an effort by the Trump administration to allow a regulated pathway for political and sports-related events contracts.
Critics warn these contracts amount to gambling and should be banned. Major players include the companies Kalshi and Polymarket.
KEY QUOTE
"For too long, the CFTC’s existing framework has proven difficult to apply and has failed our market participants. That is something I intend to fix by establishing clear standards for event contracts that provide certainty to market participants," Selig said in a speech.
CONTEXT
The CFTC and state regulators had previously battled in court to prevent event contracts and prediction market operators from allowing wagers on sports without oversight by gaming authorities or on elections.
A judge in Massachusetts ruled last week that Kalshi cannot offer sports betting in the state through its online portal, granting a request from the state attorney general.
(Reporting by Douglas Gillison in Washington; Editing by Andrea Ricci )
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