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

Commodity Futures Buying and selling Fee Chairman Michael S. Selig has formally withdrawn a 2024 discover of proposed rulemaking that might have banned political, sports activities and war-related occasion contracts, marking the clearest sign but that the company intends to control prediction markets moderately 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 combat a wave of state lawsuits alleging their sports activities contracts quantity to unlicensed playing.

The company additionally rescinded CFTC Workers Letter 25-36, a September 2025 advisory that had warned regulated entities to train warning when facilitating sports-related occasion contracts as a result of ongoing litigation. Within 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The CFTC doesn’t intend to subject ultimate guidelines underneath the withdrawn proposal, in line with the press launch.

As a substitute, the fee will advance a brand new rulemaking framework anchored within the Commodity Change Act, aiming to ascertain clear requirements for occasion contracts and supply authorized certainty for exchanges and intermediaries.

Selig Frames Withdrawal as First Step Towards Complete Occasion Contracts Rulemaking

The announcement follows remarks Selig delivered on January 29 at a joint CFTC-SEC harmonization occasion alongside Securities and Change Fee Chairman Paul Atkins. As reported, Selig used his first public speech as chairman to stipulate a broader reset of the company’s strategy to prediction markets.

“For too lengthy, the CFTC’s present framework has confirmed tough to use and has failed our market individuals,” Selig stated. “That’s 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 subject, signaling that the CFTC could intervene to defend its unique authority over commodity derivatives.

Prediction Market Platforms Navigate Booming Progress and State-Stage Authorized Battles

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

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

In the meantime, state gaming regulators have pushed again. Nevada filed a civil enforcement motion 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 related 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 outdoors 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 “Challenge Crypto” initiative with the SEC.

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