Soldier's lawyers: Prediction market law too 'ambiguous'
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- Gannon Ken Van Dyke's legal team filed a 51-page memo in the Southern District of New York supporting a motion to dismiss, arguing the Commodity Exchange Act is 'ambiguous' in treating event contracts as 'swaps' and that ordinary citizens lack 'fair notice' that prediction market wagers fall under the statute.
- Van Dyke, a US soldier, faces charges for allegedly making more than $400,000 on Polymarket event contracts using nonpublic information tied to a January military operation removing Venezuelan President Nicolás Maduro, and has pleaded not guilty.
- The CFTC under Chair Michael Selig claims 'exclusive jurisdiction' over prediction markets on the basis that event contracts qualify as 'swaps'—the exact theory Van Dyke's lawyers are attacking in court.
- George Santos was barred from trading on prediction market platforms for three years as part of a court order; he previously served only three months of an 87-month sentence for wire fraud and aggravated identity theft before President Trump commuted his term.
- Trump's teleprompter operator reportedly made more than $100,000 on Kalshi event contracts tied to the president's speeches, underscoring how federal officials personally use the platforms at the center of the Van Dyke case.
- Van Dyke's trial could begin in late 2026 or early 2027 under a June schedule, meaning the constitutional fight over prediction market regulation may not resolve for over a year.
Why it matters: If Van Dyke's motion succeeds, the CFTC's claim of exclusive jurisdiction over event contracts as 'swaps' could be undermined, loosening federal oversight of platforms like Polymarket and Kalshi where politicians' staffers and government insiders are already placing significant bets. The case puts a 51-page defense brief against a regulator that has actively asserted authority over the same platforms, with a trial potentially 18 months away.
