CFTC Seats Kalshi, Polymarket, Draftkings on Its New Advisory Panel

Seven Seats for the Event-Contract Industry

The CFTC’s Innovation Advisory Committee convenes for the first time on Thursday, Aug. 20, from 1 p.m. to 4 p.m. Eastern Daylight Time. The Federal Register notice, dated Aug. 7, describes an in-person meeting for members in Washington with virtual attendance for the public, livestreamed on the agency’s site.

Chairman Michael S. Selig, who sponsors the committee, released the agenda on Aug. 13: crypto assets, artificial intelligence, and prediction markets. “I look forward to meeting with the entrepreneurs, thinkers, and builders of the CFTC’s Innovation Advisory Committee to discuss ways emerging technologies and financial products are shaping our markets,” Selig said. Michael Passalacqua serves as the designated federal officer.

The body is not new so much as renamed. Selig launched the IAC in January as the renamed Technology Advisory Committee, saying he intended to nominate participants in the agency’s CEO Innovation Council as its charter members and inviting public nominations until Jan. 31. The 35-strong roster of members was announced on Feb. 12.

Seven of them run event-contract venues or the sportsbooks competing with them. Tarek Mansour, chief executive of Kalshi, and Shayne Coplan, chief executive of Polymarket, both hold seats. So do Jason Robins of Draftkings, Fanduel president Christian Genetski, Robinhood’s Vlad Tenev, Crypto.com chief executive Kris Marszalek, and Bitnomial’s Luke Hoersten.

The crypto contingent is broader, with Brian Armstrong of Coinbase, Uniswap Labs’ Hayden Adams, Ripple’s Brad Garlinghouse, Gemini’s Tyler Winklevoss, Kraken co-chief executive Arjun Sethi, Solana Labs’ Anatoly Yakovenko, and Chainlink Labs’ Sergey Nazarov, alongside the heads of CME Group, Nasdaq, Cboe, Intercontinental Exchange, and the Depository Trust and Clearing Corporation, and investors including a16z crypto’s Chris Dixon and Paradigm’s Alana Palmedo.

The commission has filed suit against nine states over prediction markets and has filed amicus briefs in the Sixth and Ninth Circuits and the Massachusetts Supreme Judicial Court defending its jurisdiction over the products its committee members sell. Inevitably, these industry members aren’t always on the same side: Polymarket accused Kalshi of corporate espionage in June, while Draftkings and Fanduel took market-maker roles on prediction venues while their sportsbook businesses compete with them.

The meeting also follows a two-week spurt of regulatory activity aimed at the same firms. On Aug. 12 the Division of Market Oversight issued an advisory on self-certifications for market-maker, liquidity, trading, and incentive programs, citing an increase in filings relating to event contract products that staff found procedurally or substantively deficient, and giving exchanges until Sept. 14 to amend programs already filed.

The commission proposed a framework in June to determine when event contracts are contrary to the public interest, including a definition of gaming. Notably, the agency describes the committee as created to advise the Commission and to provide insights and recommendations, and it has no authority beyond that; nevertheless, it will get the biggest names of the industry on the record on some thorny questions.