CFTC Abandons Proposal to Ban Prediction Markets, Signals Regulatory Shift
The Commodity Futures Trading Commission has formally withdrawn a 2024 proposal that sought to prohibit event contracts tied to political, sports, and war-related outcomes. Chairman Michael S. Selig dismissed the measure as a politically motivated overreach, marking a pivot toward structured oversight rather than outright bans.
Two key documents were scrapped: the 2024 proposed rulemaking and a 2025 staff advisory warning firms about sports-related markets. The decision arrives as platforms like Polymarket and Kalshi face state-level legal challenges alleging their prediction products constitute illegal gambling.
"The prior approach reflected a frolic into merit regulation," Selig remarked, emphasizing the agency's commitment to developing rules grounded in the Commodity Exchange Act. This regulatory clarity could benefit crypto-native prediction markets operating on blockchain platforms.
