CME Boss Duffy Clashes With Kalshi at CFTC Meeting Over Insider Trading Risk
CME Group's Terry Duffy sparred with Kalshi's co-founder at a CFTC hearing as horse racing's watchdog charged a respected handicapper with insider trading.
This article was produced with AI assistance and edited by the ON360 newsroom.
CME Group chief executive Terry Duffy accused prediction markets of being exposed to insider trading and manipulation at the inaugural meeting of the Commodity Futures Trading Commission’s Innovation Advisory Committee on August 20. The clash, which drew a sharp rebuttal from Kalshi co-founder Luana Lopes Lara, comes as regulators on both sides of the border weigh how much oversight the fast-growing prediction-market sector actually needs.
Duffy told the committee the CFTC has not rejected a single one of more than 2,500 self-certified contracts filed with the agency over the past two years. That list, he said, includes markets tied to mentions by U.S. President Donald Trump and player-prop-style sports contracts.
“This is not good for our industry,” Duffy said. “It’s horrible for our industry. We are not a bunch of carnival barkers at a circus.” CFTC Chair Mike Selig and Lopes Lara both pushed back during the exchange, according to Gambling Insider.
Horse racing hit with a second insider case
Market integrity concerns surfaced elsewhere in wagering this week too. The Horseracing Integrity and Safety Authority has charged Marshall Gramm, a well-known horse player, owner and professor, with using information pulled from a protected database to inform claiming decisions.
HISA chief executive Lisa Lazarus said the case involved deliberate concealment. “Our evidence showed that Mr. Gramm used essentially an automated and invisible browser to download records at scale, while employing methods to avoid detection,” Lazarus said. Gramm faces a possible lifetime ban.
It is the second insider trading controversy to hit the sport in as many weeks, following suspicious betting activity tied to races at Saratoga and Monmouth earlier in August.
Why it matters north of the border
Neither event-based prediction markets nor these particular betting products are licensed in Ontario’s regulated iGaming market, which operates under AGCO and iGaming Ontario oversight. But the debate over how quickly a young, self-certifying market can outrun its own safeguards is one Canadian regulators are watching closely as similar products edge toward U.S. mainstream adoption.
Horse racing wagering, by contrast, does cross into Canada through interprovincial simulcasting and licensed account wagering platforms. A high-profile integrity case involving database access controls is relevant to any operator or bettor relying on the same underlying race data feeds.
Ontario players are reminded that regulated operators must provide deposit limits, self-exclusion tools and links to help resources such as ConnexOntario for anyone concerned about their gambling.
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