According to BlockBeats, on July 22, the U.S. House Agriculture Committee's Subcommittee on Commodity Markets, Digital Assets, and Rural Development held a hearing to discuss how the U.S. Commodity Futures Trading Commission (CFTC) can strengthen its regulation of prediction market platforms such as Kalshi and Polymarket, and the potential role of the Clarity Act for Digital Asset Markets.
Carl Kennedy, a partner at the New York law firm Katten Muchin Rosenman, stated at the hearing that the CFTC is currently understaffed and struggling to effectively regulate the rapidly growing prediction market and digital asset sector. He believes that if the CLARITY Act is passed, it will grant the CFTC more regulatory authority and help it address the "explosive growth" of prediction markets.
Currently, CFTC Chairman Michael Selig argues that event contracts in the prediction market fall under the scope of swaps regulated by the Commodity Exchange Act, and therefore should be exclusively regulated by the CFTC. This position has sparked jurisdictional disputes between federal and state regulators, with several states previously filing lawsuits against Kalshi and Polymarket regarding the sports prediction market.
Market participants expect that the case may eventually be submitted to the U.S. Supreme Court to clarify the division of authority between the federal and state governments in regulating the forecasting market.
Furthermore, Republican lawmakers stated their intention to push for a vote on the CLARITY bill before Congress adjourns in August and will release the text of the bill soon. In June of this year, U.S. gaming industry organizations called for an explicit ban on contracts related to sporting events and casino betting in the CLARITY bill.