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CFTC’s Innovation Advisory Committee Discusses Prediction Markets

Quick Glance at the Facts

• The CFTC’s Innovation Advisory Committee met to discuss regulations for prediction markets.
• Committee members also discussed AI and cryptocurrencies.
• The committee comprises more than 30 members, including leadership from Kalshi, Coinbase, Polymarket, Nasdaq, and Robinhood.

The CFTC’s Innovation Advisory Committee met for the first time last week to discuss the future regulation of crypto, AI, and prediction markets. Prior to the meeting, the White House met with prediction market executives to discuss regulations. Topics at the CFTC committee meeting included the manipulation of “mention markets,” self-certification for event contracts, and potential regulation of prediction markets.

What Is the CFTC Innovation Advisory Committee?

The new CFTC Innovation Advisory Committee was created to replace the Technology Advisory Committee. It consists of over 30 members, including the CEOs of prediction markets, sportsbooks, and cryptocurrency marketplaces.

Members will, in theory, help advise the CFTC on issues involving:

• Finance
• Law
• Policy
• Technology

The IAC will not create any new laws itself. However, its members will help the CFTC create new regulations for companies under its jurisdiction, such as crypto marketplaces and prediction markets.

Who is on the Committee?

There are over 30 members on the CFTC’s new Innovation Advisory Committee. A few of the more prominent members of the committee include:

• Shayne Coplan – CEO and Founder of Polymarket
• Luana Lopes Lara – Co-Founder of Kalshi
• Terry Duffy – Chair and CEO of CME Group
• Brian Armstrong – CEO of Coinbase
• Michael Selig – CFTC Chairman

Several committee members met with President Donald Trump prior to the first committee meeting to discuss policy.

What Did the Innovation Advisory Committee Discuss in its 1st Meeting?

The IAC discussed multiple topics at its first meeting on August 20th, including:

• Manipulation of “mention markets”
• Self-certification for event contracts
• Creating a regulatory plan for prediction markets

Many states, including Washington and Connecticut, have attempted to outlaw prediction markets in 2026. Likewise, the topic of “mention markets” has been a hot-button issue after Trump’s teleprompter operator bet on the president’s speeches.

How This Impacts Players

Any new regulation on prediction markets, which are largely unregulated, could significantly change the platforms. Limiting self-certification, for instance, would dramatically slow the rate at which prediction markets could post new markets.

Currently, sites like Kalshi can post markets without CFTC approval. Requiring CFTC approval for every market would slow the process down but also make the markets less vulnerable to manipulation. Slowing down the process slightly would be worth the increase in safety.

GamblingNerd Take

The CFTC is currently fighting dozens of states over jurisdiction pertaining to the regulation of prediction markets. Forming the new IAC is the first step in addressing the concerns of prediction market opponents without the CFTC giving up any control.

On the other hand, allowing companies like Kalshi and Polymarket to have a say in how they are regulated could be a doomed venture. They already have close relationships with the president’s family and giving them official power on the IAC makes it unlikely that the committee will create any meaningful regulations.