The US Securities and Exchange Commission delayed action on more than two dozen proposed ETFs linked to real-world event outcomes while seeking further details from issuers. The funds would track yes-or-no contracts on platforms including Kalshi and Polymarket, and filings warn investors could lose their entire investment.
The delay leaves the proposed route for packaging prediction-market contracts into ETFs under regulatory review.
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Crypto.com and Robinhood Markets asked the US Supreme Court to clarify whether state gaming regulators can act against event contracts, arguing that the Commodity Exchange Act pre-empts such action. The court has not agreed to take up the issue, while state regulators contend that sports event contracts fall under gambling laws and require licences.
New Jersey has petitioned the US Supreme Court over whether sports prediction contracts are exempt from state gambling laws. The state challenges an appellate ruling that prevented its gaming authorities from blocking Kalshi’s sports contracts. The Supreme Court has yet to decide whether to hear the case.
PredictIt chief strategy officer Flip Pidot said the US Supreme Court could consider the prediction market jurisdiction dispute by June next year. He based that assessment on potentially conflicting appeals court rulings as the CFTC and state authorities dispute oversight of event contracts.
Nine Democratic representatives have asked the Federal Trade Commission to review how prediction-market platforms promote their services to consumers. The lawmakers cited possible differences between marketing that resembles sports betting and operators’ regulatory descriptions of their products, and asked the FTC to respond by 29 June on potential investigative or enforcement action.
The National Pork Producers Council and more than 20 agricultural groups asked the CFTC to review prediction contracts linked to commodity prices. They raised concerns about price discovery, hedging, market volatility and settlement disputes, and said the contracts lack safeguards such as federally mandated position limits and volatility controls.