Prediction Markets Match Fed Economists — But Face Legal Firestorm

[madmax]

Prediction markets are gaining both credibility and controversy as new research suggests crowd-based forecasts may rival traditional economic models. A recent analysis found that rate projections from Kalshi were just as accurate over a roughly 150-day horizon as forecasts from the Federal Reserve Bank of New York’s Survey of Professional Forecasters. In simple terms, real-money bets on future Federal Reserve decisions performed on par with predictions from top economists.

But as platforms grow in influence, regulators are pushing back. Commodity Futures Trading Commission Chair Michael Selig signaled the agency’s intent to assert exclusive federal oversight, filing an amicus brief in a Ninth Circuit case involving Crypto.com and the Nevada Gaming Control Board. At the heart of the dispute is whether prediction contracts fall under federal commodities law or state gambling regulations — a ruling that could reshape the future of the industry nationwide.

[cryptohog]

once prediction markets start influencing narratives, regulators were always going to step in.