CFTC Formally Withdraws Biden-Era Proposal to Ban Sports and Political Prediction Markets

The Commodity Futures Trading Commission just pulled a regulatory U-turn—and prediction markets are cheering.

Regulatory Retreat

Remember that proposal to outlaw wagering on elections and game outcomes? The CFTC officially scrapped it. No more threat of a blanket ban on contracts tied to sports scores or political races. The agency's latest move signals a stark departure from the previous administration's cautious stance.

Markets Breathe Easy

Operators who've built platforms around these speculative instruments can stop holding their breath. The withdrawal removes a looming compliance nightmare—one that could have forced shutdowns or major restructuring. Instead, the space gets to keep evolving, for now, without that particular regulatory axe hanging overhead.

What's Next?

Don't mistake this for a free pass. The CFTC isn't suddenly endorsing wild west speculation. Expect scrutiny to shift toward existing oversight frameworks—anti-fraud rules, market manipulation safeguards, and disclosure requirements remain firmly in place. The message seems to be: 'We'll regulate, not eradicate.'

The Finance Angle

For traders, it's a green light for a niche but growing asset class. Liquidity in prediction contracts might inch up as uncertainty fades. Some platforms could see a bump in user activity—after all, nothing fuels participation like regulatory clarity. Just another day where finance finds a way to price literally everything, from Super Bowl odds to election outcomes. Because if there's a dollar to be made betting on an outcome, Wall Street—and now Main Street via crypto—will build a market for it. Sometimes it feels like the only thing the financial system won't securitize is common sense.

The CFTC's reversal isn't just a policy change—it's a bet on the market's own ability to manage risk. Whether that's visionary or naive depends entirely on which side of the trade you're on.

Selig Frames Withdrawal as First Step Toward Comprehensive Event Contracts Rulemaking

The announcement follows remarks Selig delivered on January 29 at a joint CFTC-SEC harmonization event alongside Securities and Exchange Commission Chairman Paul Atkins. As reported, Selig used his first public speech as chairman to outline a broader reset of the agency’s approach to prediction markets.

“For too long, the CFTC’s existing framework has proven difficult to apply and has failed our market participants,” Selig said. “That is something I intend to fix by establishing clear standards for event contracts that provide certainty to market participants.”

Selig also directed staff to reassess the commission’s participation in pending federal court cases where jurisdictional questions are at issue, signaling that the CFTC may intervene to defend its exclusive authority over commodity derivatives.

Prediction Market Platforms Navigate Booming Growth and State-Level Legal Battles

The withdrawal arrives as prediction markets experience rapid expansion and intensifying regulatory friction. Combined trading volumes on Polymarket and Kalshi, the two largest platforms, reached $37 billion in 2025, drawing in major exchanges eager to compete.

Coinbase launched prediction markets through a partnership with Kalshi, a federally regulated designated contract market, in late January. Crypto.com recently spun out its prediction business into a standalone platform called OG. Polymarket returned to the U.S. market in December after receiving CFTC no-action relief, and Gemini secured a designated contract market license for its Titan platform.

Gemini Clears Key CFTC Approval to Launch Prediction Market Platform in US

Billionaire Winklevoss twins’ Gemini Space Station received a key nod from the US Commodity Futures Trading Commission (CFTC) to launch its betting platform ‘Gemini Titan’ to US customers.

The crypto…

Meanwhile, state gaming regulators have pushed back. Nevada filed a civil enforcement action against Coinbase this week, arguing that event contracts tied to sports constitute unlicensed gambling. Coinbase has sued regulators in Michigan, Illinois and Connecticut over similar claims.

The NCAA has also urged the CFTC to halt college sports prediction trading, warning that the sector exposes student-athletes to integrity risks and operates outside state-level safeguards.

Selig, who was sworn in on December 22, has not provided a firm timeline for the new rulemaking, but positioned event contracts as a priority alongside the agency’s broader “Project Crypto” initiative with the SEC.