The Commodity Futures Trading Commission (CFTC) may require increased staffing and expanded authority to manage the rapid growth of prediction markets, according to testimony at a recent U.S. House Agriculture Subcommittee hearing.

CFTC Oversight and Resource Challenges

During the July 21 hearing, Carl Kennedy, a lawyer and former CFTC official, warned that the regulator is currently understaffed to effectively supervise platforms like Kalshi and Polymarket, which have seen explosive growth. He suggested that if Congress broadens the CFTC?s jurisdiction over digital assets through legislation such as the Digital Asset Market Clarity Act (CLARITY Act), additional resources would be essential to maintain effective oversight.

Kennedy emphasized that the existing Commodity Exchange Act already provides a regulatory framework for event contracts on registered exchanges. Trading volume on CFTC-registered prediction markets surpassed $25 billion in 2025, with daily event-contract listings on a major platform increasing from approximately 1,600 in April 2025 to around 162,000 in April 2026.

He also noted the importance of adequate funding and staff to apply the regulatory requirements covering market surveillance, financial integrity, customer protection, and manipulation controls to sports event contracts.

The ongoing legal dispute focuses on whether sports event contracts are federally regulated derivatives or gambling products subject to state regulation. CFTC Chair Michael Selig has asserted the agency?s exclusive authority over federally regulated prediction markets. Meanwhile, states continue to litigate against platforms like Kalshi and Polymarket, challenging federal jurisdiction.

The CFTC received over 1,500 public comments on its prediction market rulemaking earlier this year, with industry participants supporting federal oversight and several state gambling regulators advocating for state-level control.

Recent actions include the CFTC blocking Kalshi from unwinding certain sports event contracts in Michigan, illustrating the intensifying regulatory conflict between federal and state authorities.