CFTC Commissioner Summer Mersinger says election event prediction markets are 'here to stay'

Commodity Futures Trading Commission (CFTC) Commissioner Summer K. Mersinger said that election event contracts on platforms such as Kalshi are "here to stay" in a Tuesday webinar for The Federalist Society, a conservative legal organization. 

"Congress could always come in and tell us differently," Mersinger said in the crypto-focused webinar . "Of course, we’re going to pivot and do what they tell us to do. But as far as the way the commission is going to handle this going forward, short of a rule-making changing things, election contracts are here to stay and we’re going to have to adapt to that environment and those markets. And I think it’s a good thing."

During campaign season last year, the CFTC clashed with Kalshi over whether the platform's contracts over election results could lead to " gaming ." In September, a federal judge ruled that Kalshi overstepped its authority in attempting to block Kalshi. The agency quickly filed a losing appeal, noting that such markets are susceptible to manipulation , The Block previously reported. 

In the webinar on Tuesday, Mersinger addressed whether election event prediction markets could influence the integrity of elections, stating that "these contracts have a lot of safeguards in place to ensure that certain manipulation doesn’t occur."

"I think we have to carefully look at these contracts as they come online, but the idea that we can unilaterally say 'no' by calling everything gaming, those days are over and the Commission is going to have to take a new approach," Mersinger said. "And we have to be a little more pro-innovator and understand that something might look different from what we know or what we are used to, but different isn’t bad."

She noted that these platforms have utility, in an apparent nod to the theory that prediction markets offer a different, perhaps less biased way, of interpreting news events by offering people the ability to have a stake in the result of future outcomes.

"We need to appreciate that and move forward with that in mind," Mersinger said.

The decentralized prediction market Polymarket faced scrutiny after one user, a French national who goes by "Theo" won $80 million from betting on Donald Trump for the 2024 presidential election winner. Polymarket's internal review showed that no market manipulation occurred and that the individual's bet reflected available information. France, however, still restricted users from using the platform in November 2024 and investigated whether Polymarket complied with French gambling laws. 

Aside from election prediction markets, the CFTC also questioned Kalshi and the Singapore-based crypto exchange Crypto.com on the compliance of their Super Bowl LIX sports events contracts ahead of the Feb. 9 game. 

Mersinger, nominated by President Biden, was first sworn in as one of the two sitting CFTC commissioners in March 2022. She said in the Tuesday webinar that her views are her own and do not necessarily reflect that of the agency.