CLARITY Act could help CFTC deal with prediction markets: Lawyer
US House Agriculture Subcommittee members examined how the CFTC should oversee prediction markets such as Kalshi and Polymarket, alongside pending crypto market structure legislation. Katten lawyer Carl Kennedy said the CFTC is likely too short-staffed to regulate and enforce rules for these fast-growing platforms, and argued the CLARITY Act could expand the agency’s authority over digital assets and prediction markets while also justifying more resources. The hearing came amid growing conflict over CFTC Chair Michael Selig’s view that the agency has exclusive jurisdiction over event contracts, which he treats as swaps. That stance has fueled disputes with states that are trying to restrict sports-related prediction markets, including lawsuits against Kalshi and Polymarket. Some experts think the issue may eventually reach the Supreme Court. Senate Republicans want to advance the CLARITY Act soon, but its text had not yet been released, and key prediction market language remained unclear.
