Following the Commodity Futures Trading Commission (CFTC)’s proposal of a regulatory framework for prediction markets, American Gaming Association (AGA) President & CEO Bill Miller addressed the notice on June 10.
The framework provides the CFTC’s definition of gaming for the first-time, described as “any activity that one or more participants typically engage in for purposes of recreation or to entertain others, is governed by rules and includes measurable occurrences or outcomes that depend on the participants’ luck, skill or athletic ability during the activity.“
The notice of proposed rulemaking also opened a 45-day public commentary period for potential amendments to the regulations. The Commission requested public comment on a variety of topics, including insider information, margin trading, core principles, blockchain markets and public-interest bans.
“The CFTC will protect the integrity of our regulated markets without standing in the way of responsible innovation,” CFTC Chairman Michael Selig said.
“This proposal gives the Commission a durable, transparent framework to identify the contracts Congress directed us to scrutinize while letting legitimate markets move forward.”
In response, Miller wrote: “This is a remarkable attempt to redefine what constitutes sports betting. It makes a mockery of congressional intent while going against a bipartisan coalition of 41 Attorneys General, countless legislators across the country and the 81% of voters who recognize that the so-called ‘prediction markets’ are backdoor sportsbooks evading state and Tribal law.
“The consequences are real. Prediction markets’ evasion of state and Tribal laws is estimated to have already cost communities across the country more than $1bn in sports betting tax revenue, hurting critical local projects. This siphoning will intensify as ‘prediction markets’ continue refusing to comply with state and Tribal law.”
The CFTC is also focused on receiving feedback regarding whether existing Commodity Exchange Act principles are sufficient or if new regulations are required to address “unique” risks in prediction markets.
The Commission will also look for comments on if markets related to war, terrorism, assisnation and unlawful conduct should be iprohibited.
In May, Miller told Congress that the CFTC is moving beyond its intended remit by allowing sports-related prediction markets to operate under federal derivatives rules, as well as urged lawmakers to prohibit the offering alongside Indian Gaming Association Chairman David Bean.
FanDuel formed a new partnership with Crypto.com and its CFTC-regulated exchange OG to expand its prediction markets offering and introduce combination event contracts on June 9
