The Coalition for Prediction Markets (CPM) was established by Crypto.com and Kalshi on Thursday with the goal of promoting “safe, transparent, and federally supervised access to prediction markets.”
Nearly half of Americans under 45 have used online prediction markets, according to the alliance, which also includes Coinbase Global (NASDAQ: COIN), Robinhood Markets (NASDAQ: HOOD), and Underdog. This comes at a time when event contracts are experiencing rapid development. CPM also emerges as the still-developing sector battles a number of state-level legal issues that jeopardize federal oversight of prediction markets.
According to a statement from the CPM, “allowing different state regimes to control prediction markets undermines the very safeguards that keep markets fair and prevent insider advantage, reinforcing the perception that financial systems are rigged in favor of those with influence.”
The Commodities Futures Trading Commission (CFTC) oversees prediction market operators, including CPM members. According to the corporations, government oversight offers a level of consistency that is similar to what federal authorities do when they supervise domestic financial markets.
CPM Focuses on the Federal
Companies like Kalshi have come under increasing scrutiny and legal action from regulators in states where sports betting is legal as a result of their expansion into sports event contracts. These regulators contend that the prediction market companies are providing a product that is essentially sports betting without the necessary licensing.
In response, Kalshi has defended itself by using federal preemption, a legal principle that states cannot assume federal regulatory authority. Legal experts predict that the Supreme Court will decide the cases in the end. Meanwhile, CPM seeks to strengthen federal regulation of the nation’s prediction markets.
Courtesy: https://www.covers.com, https://www.casino.org, https://pechanga.net
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