In a letter authored to the Commodity Futures Trading Commission, seven members of Congress are calling for the agency to regulate market prediction companies.
WASHINGTON D.C., DC โ This past week, people using the prediction market platform Polymarket could wager if a U.S. airman who was shot down in Iran would be rescued, which prompted immediate criticism and an eventual apology by the company.
Prediction markets are online platforms where people can buy and sell contracts based on the outcome of real-world events. Such events can range from elections, sports or even geopolitical developments.
On Monday, seven Democratic members of Congress, led by U.S. Rep. Seth Moulton, D-Mass., authored a letter to the Commodity Futures Trading Commission demanding better oversight of prediction markets and investigations into insider trading.ย
โWe write to express concern that prediction markets have come to resemble an unregulated โWild West,โโ the letter begins.ย
The letter references alleged insider trading when the United States military took action in Venezuela and Iran.ย
โThe prevalence of event contracts that appear to flout United States law is concerning and indicative of a sector lacking proper oversight,โ the letter says.ย
The letter to Chairman Michael S. Selig demands a response by April 15.ย
However, the letter may not have much of an impact since Seligโs agency has filed suit against three statesย that have attempted to ban prediction markets.ย
The agency accuses the states of overstepping the CFTCโs federal authority to regulate prediction markets.ย
In a February posting on the agencyโs website, Chairman Selig wrote โThese exchanges arenโt the Wild West, as some critics claim, but self-regulatory organizations that are examined and supervised by experienced CFTC staff.โย
It has been widely reported the president’s son, Donald J. Trump Jr., is also an investor in Polymarket and an adviser to Kalshi.ย
