A CFTC roundtable on prediction markets turned into a sharp public fight on Thursday in Washington, D.C., as CME Group Chairman Terry Duffy and Kalshi co-founder Luana Lopes Lara traded insults over market manipulation and regulation. The clash unfolded at a Commodity Futures Trading Commission meeting where event contracts were being debated in front of regulators.
The fight matters now because the same room that was meant to examine how prediction markets should be overseen became a stage for a broader industry dispute. Executives from traditional finance, crypto and prediction markets were all there, and the argument quickly moved beyond theory to the business lines each side wants regulators to allow.
Duffy said he was deeply concerned about prediction markets and warned that some contracts are susceptible to manipulation. He mocked a Nathan's hot dog eating contest contract and asked why Kalshi could offer a compute prediction market while CME's proposed compute contracts remained under review. “We’re not a bunch of carnival barkers at a circus,” he said. “We are running the most envious markets in the world in the United States of America.”
Lopes Lara stepped in after Kalshi was called out by name and pushed back directly. “I just wanted to respond since we were called by name here,” she said, then asked whether CME had ever had market manipulation issues in its own history. Duffy shot back, “If you’d like to have a debate, I’m happy to have a debate with you,” and added, “I have more people in my regulatory department than you have in your whole company.” She answered, “Maybe you should learn a bit about efficiency then,” and he replied, “Well, maybe you should learn about credible markets.”
That exchange exposed the fault line running through the hearing. Lopes Lara said every market has risk, including new ones, and that problems have surfaced in traditional markets and exchanges onshore and offshore. She argued that regulation exists to find those problems and deal with them correctly. Walt Lukken stepped in during the exchange, but the point had already landed: the debate is no longer about whether prediction markets will draw scrutiny, but which contracts regulators will let through and on what terms.
Later on Thursday, DraftKings CEO Jason Robins tried to cool things down, urging participants to “stop attacking each other’s businesses.” That left the core issue unresolved for now. CME's proposed compute contracts are still under review, while Kalshi's compute prediction market is already part of the regulatory fight, and the CFTC has not said when it will decide where that line should be drawn.
