CLARITY Act could expand CFTC authority over prediction markets, lawyer tells House
Attorney Carl Kennedy told a House subcommittee that the CLARITY Act could give the Commodity Futures Trading Commission (CFTC) added authority to regulate prediction market platforms including Kalshi and Polymarket. The testimony, published July 21, capped a July 17 hearing on the regulatory framework for event-contract platforms. The bill has become a focal point in the debate over how federal agencies should oversee the sector.
Kennedy's testimony inserts the CLARITY Act into an already crowded field of federal and state threats to prediction market platforms. For Kalshi and Polymarket, both CFTC-registered, the bill offers a double-edged prospect: clearer federal rules could streamline compliance across state lines, but expanded CFTC authority could also bring tighter product limits or trading restrictions the agency cannot currently impose.
The hearing arrives as Congress considers a separate bipartisan Senate bill that would ban sports event contracts outright. Platforms now face parallel pressure from lawmakers and state attorneys general in Michigan, New York, Illinois, and New Mexico. The CLARITY Act's fate will signal whether federal regulators gain the tools to set national standards or cede ground to a patchwork of state enforcement.