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The Commodity Futures Trading Commission has given prediction markets 30 days to remove domestic geographic restrictions that violate its impartial access requirements or explain why they cannot comply, according to InGame.
The interpretation could affect Kalshi, DraftKings, FanDuel and Fanatics, whose sports event contracts face state court restrictions or sportsbook licensing pressure.
CFTC interprets impartial access to cover geographic restrictions
The CFTC’s interpretation addresses its second core principle, concerning impartial access. Previously, the agency had not interpreted that principle to require geographic access across the United States.
Designated contract markets must stop domestic restrictions that violate the requirements or submit an explanation to the Division of Market Oversight within the 30-day window. The interpretation also applies to intermediaries, including futures commission merchants and introducing brokers that give customers access to other exchanges.
“Derivatives markets must operate on a uniform basis at a national scale in order to achieve the purposes set out in the Commodity Exchange Act,” CFTC Chairman Michael Selig said.
The agency said restricted access can reduce liquidity and undermine an exchange’s effectiveness as a marketplace for trading and risk management. It cited sports contracts as a particular concern because excluding regions with strong interest in a team could reduce those contracts’ overall liquidity.
State court orders and licensing threats complicate access
Kalshi’s sports contracts have been banned by court orders in Michigan, Nevada and Washington, InGame reported. The company also withdrew the contracts from Utah after the state brought criminal charges.
DraftKings, Fanatics and FanDuel restrict access to sports event contracts in some states because state gaming commissions have threatened to revoke the sportsbook licenses of operators offering those contracts.
If you or someone you know has a gambling problem, call the Massachusetts Problem Gambling Helpline at 1-800-327-5050 to speak with a trained specialist.
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Source: As reported by InGame.
