Andreessen Horowitz has entered the growing fray over US prediction markets.
summary
- A16z says a state ban could weaken federally regulated prediction markets and reduce user access nationwide.
- The CFTC says many states are trying to control the markets under federal oversight rules now.
- Senators and staff now face a ban on predictive market trading amid growing concerns about trust.
The venture capital firm supports the Commodity Futures Trading Commission against state efforts to restrict platforms like Kalshi and Polymarket.
The dispute centers on who should organize event contracts. States argue that some contracts appear to be a gamble. The CFTC and a16z argue that federally regulated markets should not face a separate ban in each state.
a16z Submitted Letter to the CFTC in response to the agency’s rulemaking on prediction markets. The company said state crackdowns, including cease-and-desist letters and legal threats, could keep users out of marketplaces overseen by the federal regulator.
The company argued that exchanges could lose liquidity if they were forced to ban users by state. “Having to deny neutral access” would likely reduce available liquidity in affected markets, she wrote.
The CFTC is clashing with several states
The CFTC has filed lawsuits against several states, including… Illinois, Arizona, Connecticut, New Yorkand wisconsin. The agency claims that these states are trying to regulate markets that fall under federal oversight.
State officials have backed down. They say platforms offering contracts tied to sports, elections and other events may act like gambling companies. a16z rejected that view and said the CFTC should decide how to enforce “gambling” under the Commodities Act.
Meanwhile, the fight comes as Congress is also taking action on the circulation of political events. US Senate Vote Senators and staff unanimously banned from trading in prediction markets, including platforms like Kalshi and Polymarket.
Kalci said she already bans members of Congress from using her platform. The company described the Senate vote as “a great step to increase confidence in the markets.” The ban reflects concern that lawmakers and staff could access information that other traders cannot.
Prediction markets have become a broader media story
a16z has also moved deeper into predictive market culture through media. The company has Supported “Situation Monitor”, a 24/7 live broadcast on X linked to Polymarket culture and live online news.
This media push shows how prediction markets are now at the center of a wider debate. Platforms don’t just host deals at future events. They also shape how users watch politics, sports, cryptocurrencies, and breaking news.
