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

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The company known as the 2024 rule a “frolic into advantage regulation” and stated it should pursue new rulemaking grounded within the Commodity Exchange Act to present readability for prediction market operators.

Commodity Futures Trading Commission Chairman Michael S. Selig has formally withdrawn a 2024 discover of proposed rulemaking that will have banned political, sports activities and war-related occasion contracts, marking the clearest sign but that the company intends to regulate prediction markets somewhat than prohibit them.

Key Takeaways:

– The CFTC scrapped each its 2024 proposal to ban occasion contracts and a 2025 workers advisory that had warned companies away from sports-related markets.

– Chairman Selig dismissed the sooner ban as a politically pushed “frolic into advantage regulation” and dedicated to constructing a brand new rules-based framework.

– The transfer lands as Kalshi, Polymarket and Coinbase battle a wave of state lawsuits alleging their sports activities contracts quantity to unlicensed playing.

The company additionally rescinded CFTC Staff Letter 25-36, a September 2025 advisory that had warned regulated entities to train warning when facilitating sports-related occasion contracts due to ongoing litigation. In the remarks following the choice, Selig stated:

“The 2024 occasion contracts proposal mirrored the prior administration’s frolic into advantage regulation with an outright prohibition on political contracts forward of the 2024 presidential election.”

The CFTC doesn’t intend to concern last guidelines beneath the withdrawn proposal, in accordance to the press launch.

Instead, the fee will advance a brand new rulemaking framework anchored within the Commodity Exchange Act, aiming to set up clear requirements for occasion contracts and present authorized certainty for exchanges and intermediaries.

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 define a broader reset of the company’s strategy to prediction markets.

“For too lengthy, the CFTC’s present framework has confirmed troublesome to apply and has failed our market individuals,” Selig said. “That is one thing I intend to repair by establishing clear requirements for occasion contracts that present certainty to market individuals.”

Selig additionally directed workers to reassess the fee’s participation in pending federal court docket circumstances the place jurisdictional questions are at concern, signaling that the CFTC might intervene to defend its unique authority over commodity derivatives.

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

The withdrawal arrives as prediction markets expertise speedy enlargement and intensifying regulatory friction. Combined buying and selling volumes on Polymarket and Kalshi, the 2 largest platforms, reached $37 billion in 2025, drawing in main exchanges keen to compete.

Coinbase launched prediction markets by means of a partnership with Kalshi, a federally regulated designated contract market, in late January. Crypto.com lately spun out its prediction business right into a standalone platform known as OG. Polymarket returned to the U.S. market in December after receiving CFTC no-action reduction, and Gemini secured a designated contract market license for its Titan platform.

Meanwhile, state gaming regulators have pushed again. Nevada filed a civil enforcement action in opposition to Coinbase this week, arguing that occasion contracts tied to sports activities represent unlicensed playing. Coinbase has sued regulators in Michigan, Illinois and Connecticut over comparable claims.

The NCAA has additionally urged the CFTC to halt school sports activities prediction buying and selling, warning that the sector exposes student-athletes to integrity dangers and operates exterior state-level safeguards.

Selig, who was sworn in on December 22, has not offered a agency timeline for the brand new rulemaking, however positioned occasion contracts as a precedence alongside the company’s broader “Project Crypto” initiative with the SEC.

The put up CFTC Formally Withdraws Biden-Era Proposal to Ban Sports and Political Prediction Markets appeared first on Cryptonews.

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