CFTC Signals Green Light for Prediction Markets With New Contracts Rulebook

TLDR

• CFTC resets event market rules, unlocking growth and regulatory clarity.
• New CFTC framework brings certainty to political and sports prediction markets.
• CFTC scraps old limits, paving way for regulated event trading expansion.
• Federal overhaul reshapes prediction markets and event contract oversight.
• CFTC reboot signals clearer rules for crypto-driven event markets.

The CFTC moved to reshape prediction markets as it began work on a clear rulebook for event contracts. The agency set a new direction for platforms that trade on politics, sports, and real-time events. Moreover, the shift marked a decisive break from past uncertainty that slowed broader market development.

CFTC Starts Major Reset for Event Contract Oversight

The CFTC advanced a plan to withdraw older proposals that targeted political and sports contracts. The agency said the previous framework created confusion, yet it now aims to provide clarity that supports lawful innovation. Additionally, the move arrived as market activity expanded across crypto-native platforms and federally regulated venues.

The CFTC outlined steps that will remove the 2024 proposal restricting political and sports markets and the 2025 advisory that warned on sports contracts. The agency said these actions will help rebuild certainty around permissible event contracts and support onshore growth. Furthermore, the updated direction will align oversight with current market conditions.

The CFTC set a path toward drafting a formal rulebook that defines event contracts and clarifies compliance duties. The agency said the existing approach has proven hard to apply, and it will replace it with standards built for modern trading. As a result, platforms will receive a more predictable regulatory environment.

Platforms Expand as CFTC Reworks Rules

Polymarket continued to gain traction as a major liquidity point for political and headline-driven markets. The platform attracted rising activity as users sought round-the-clock exposure to real-time shifts. Moreover, the sector benefited from growing interest as event trading moved beyond niche status.

Kalshi maintained its stance that event contracts fall under federal derivatives law rather than state gambling rules. The platform said its products operate under national oversight, and rising litigation has not altered its position. Consequently, the updated direction from the CFTC could strengthen its regulatory footing.

Crypto-linked venues also expanded volumes as event trading blended open blockchain systems with structured derivatives rules. The CFTC said the moment offered an opportunity to modernize oversight and provide stronger guardrails. Therefore, the industry viewed this shift as an important step toward legal clarity.

Jurisdiction and Federal Coordination Gain Focus

The CFTC signaled renewed coordination with the SEC on digital asset definitions and swaps classification. The agencies plan to clarify boundaries between commodity options, security-based swaps, and other derivatives. Additionally, the effort aims to streamline oversight and reduce gaps across federal rules.

The CFTC will reassess its role in pending court matters that involve jurisdiction over event-based contracts. The agency said it will defend its authority where commodity derivatives fall under its mandate. Moreover, this approach targets consistent application of federal law.

State regulators continued to challenge the expansion of sports-related event markets, yet the federal direction now appears clearer. The CFTC’s updated steps may guide how these disputes evolve and how platforms operate nationwide. As the rulebook develops, the sector moves toward a period of more certain growth.

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