CFTC proposes rules allowing sports and election prediction markets

On June 10, the U.S. Commodity Futures Trading Commission released a 267‑page notice of proposed rulemaking that would reshape prediction markets. The draft presumes that contracts tied to aggregate sports outcomes—final scores, win‑loss records, or season‑long statistics—are permissible under a public‑interest test, while contracts linked to player injuries, officiating decisions, single‑play outcomes, or physical altercations are likely to be barred as manipulative. Election‑related contracts are clarified as not constituting “gaming,” reducing regulatory uncertainty for platforms such as Kalshi and Polymarket.

The proposal also bans contracts related to war, terrorism, assassination and other extreme events. The CFTC will review each event contract individually, applying a systematic public‑interest framework. Chairman Mike Selig emphasized the need to protect market integrity while fostering responsible innovation. A 45‑day public comment period is opened, and industry groups, as well as sports leagues like the NFL and NBA, have already voiced concerns and support for tighter controls.

If finalized, the rules would give the CFTC clear authority over event‑contract derivatives, potentially limiting state‑level gambling challenges and setting a national standard for prediction‑market offerings.