The U.S. Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) are scheduled for a combined roundtable on September 29 to scrutinize event contracts and prediction markets, as regulators aim to clarify a rapidly evolving sector with inconsistent regulatory oversight.

The agenda will also encompass discussions to broaden 24/7 trading, align portfolio margining regulations, and establish exemptions for innovation, according to a collaborative announcement from the agencies.

New products currently face challenges due to inconsistent oversight and legal ambiguity, with regulators highlighting that cryptocurrency trading and event contracts have surpassed the existing regulatory frameworks. “Prediction markets have been in existence globally for decades, but they are witnessing significant growth spurred by demand from market operators and the public,” they stated.

Firms like Kalshi, Robinhood, and Crypto.com have introduced sports event contracts across the U.S., even in areas where sports betting has not been legalized. Kalshi recently introduced parlay-style markets, while Robinhood plans to roll out football prediction contracts through its Predictions Hub alongside Kalshi.

The marketplace has also encountered legal challenges, with the Ho-Chunk Nation of Wisconsin filing a federal lawsuit against both Kalshi and Robinhood, claiming violations of the Indian Gaming Regulatory Act and making allegations of racketeering.

The commissions underscored the necessity of preventing regulatory voids. “The SEC and CFTC must collaborate to avoid a regulatory ‘no man’s land’ that could arise from inaction by either agency,” they remarked. “It’s a fresh era for the SEC and the CFTC, and we reaffirm the essentiality of regulations that support progress.”

The September 29 meeting is a result of multiple delays. The CFTC had previously committed to organizing a roundtable focused on prediction markets in the spring but canceled it in April, leading to frustration among industry stakeholders. The agency has since collected over 40 submissions from various stakeholders, including state regulators, sports leagues, tribes, and legislators.

Former CFTC Commissioner Kristin Johnson emphasized the urgency of this endeavor before stepping down this month, highlighting that the U.S. currently has “insufficient safeguards and limited insight into the prediction market arena.”

The CFTC is presently managed by Acting Chair Caroline Pham, the sole sitting commissioner awaiting the confirmation of a permanent successor.