CFTC monitors offshore betting platforms connected with election outcome trading
The regulator said it is prepared to act against illegal activity.
The US Commodity Futures Trading Commission (CFTC) has taken steps in “closely monitoring” unregulated offshore companies that give American bettors the option to trade on US election outcomes, according to a recent BNN Bloomberg news report.
During a conference that was hosted by Georgetown University’s Psaros Center for Financial Markets and Policy, US CFTC Chairman Rostin Behnam shared with reporters that the regulator is “observing any activity that’s occurring offshore and providing exposure to US customers.”
When questioned on what the group plans to do regarding the crypto-betting platform, Polymarket, Behnam responded, “If anyone, Polymarket or otherwise, conducts themselves in a way that breaks the law, we will use our civil enforcement authority to make sure that conduct stops.”
Polymarket currently has a nearly $1bn trading volume connected to “dozens of US election outcomes,” the report said.
Its financial products are under the jurisdiction of the CFTC because they are structured as derivatives contracts.
The CFTC has also been in a legal grapple with Kalshi on the fate of US election betting during the past several months.
Federal judge Jia Cobb recently ruled in favor of allowing Americans to bet on the outcome of the upcoming US election. Following the ruling, Kalshi set up election betting venues for US players.
However, the CFTC appealed Cobb’s ruling within hours of the decision and all election betting options were removed from Kalshi’s website. After the appeal was filed, the Court of Appeals for the District of Columbia Circuit issued an order to “temporarily freezing the matter until it can consider and rule on the issue.”
Prior to Judge Cobb’s ruling to allow election betting, the CFTC had ordered Kalshi not to offer derivatives that would allow players to wager on the election.
The regulator and Kalshi are scheduled to hold a short debate in court this week.
Both parties will have 15 minutes to present their positions during a hearing on September 19 at 2PM. The CFTC and Kalshi will present their arguments before a panel of three Circuit Court judges.
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