Lawmakers and witnesses debate regulation of event contracts as prediction markets grow
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Summary
Members questioned witnesses about faster‑growing event contract markets (sites such as Kalshi and Polymarket). Former CFTC officials said these markets can be accurate predictors and argued for regulatory frameworks that protect customers without blocking innovation.
WASHINGTON — The House Agriculture Committee heard exchanges about event contracts — financial instruments that let users take positions on outcomes such as elections or other events — as members raised questions about accuracy, incentives and whether the CFTC should regulate such markets.
Representative Mary Salinas (questioning period) described the rapid growth of platforms such as Kalshi and Polymarket and said those markets saw hundreds of millions wagered and that some contracts appeared to provide accurate predictive signals during the 2024 election cycle.
Former Chairman Christopher Giancarlo, who now serves on Polymarket’s advisory board, said event contract markets are driven by participant demand and that, “in 2024 … event contract markets were far more accurate in predicting the outcome of those elections” than polling in many cases. He said such markets offer societal signals and suggested regulators should build a framework to protect vulnerable users if Congress moves to regulate them.
Why it matters: Event contracts touch on gambling laws, consumer protections, market integrity and political‑process concerns. Lawmakers raised whether such markets should be treated differently when they concern political outcomes versus sports or pop culture.
Next steps
Giancarlo and other panelists urged Congress to consider a regulatory approach that preserves useful price signals while protecting users and ensuring platforms have appropriate procedures and disclosures.