SEC chair says some prediction markets may fall under the commission’s oversight

SEC Chair Paul Atkins said the Securities and Exchange Commission may assert oversight over parts of the rapidly expanding prediction-market sector. Speaking before the Senate Banking Committee, he noted that some products could qualify as securities if their structure and contract language exhibit the characteristics of investment instruments.

Prediction markets are currently overseen de facto by the CFTC, whose framework often relies on self-regulation by registered platforms. But Atkins described the sector as an area of “potential jurisdictional overlap” between the two regulators and stressed that the SEC and CFTC should maintain a “coordinated approach” to emerging markets. He pointed out that security futures – derivatives on stocks and indexes – are already jointly supervised, creating a possible precedent for certain predictive contracts.

Responding to a question from Senator Dave McCormick about whether Congress must pass new legislation for the SEC to intervene, Atkins said no additional authority is needed. “A security is a security, regardless of form,” he said, adding that in many cases the “specific wording and substance of the product” will determine which agency has oversight.

The comments come amid explosive growth in prediction markets. Over the past year, the sector expanded more than fourfold to $63.5 billion. Market leaders Kalshi and Polymarket have reached valuations of $11 billion and $9 billion respectively. Investors use these platforms to trade outcomes on elections, sports, cultural trends, and asset-price movements.

A further source of tension has been state-level litigation. Regulators are challenging the status of sports-related contracts – the largest segment of the industry – arguing that they amount to unlicensed sports betting. Any additional scrutiny from the SEC could complicate the operating environment even more.

It remains unclear which specific platforms or products the SEC may attempt to classify as securities, but Atkins’ remarks signal a potential expansion of the agency’s role in one of the fastest-growing segments of crypto finance.