Commodity Futures Trading Commission has withdrawn a Biden-era proposal that would have banned sports and political prediction markets, reversing course on one of the most contentious rulemakings affecting event contracts.
CFTC chair, Mike Selig, said the 2024 proposal represented a “frolic into merit regulation” by the previous administration and confirmed the agency will not move forward with final rules.
“The Commission is withdrawing that proposal and will advance a new rulemaking grounded in a rational and coherent interpretation of the Commodity Exchange Act,”
Selig said.
The decision directly affects fast-growing prediction market platforms such as Polymarket and Kalshi, which allow users to trade contracts tied to sports, elections and other real-world events.
These platforms, along with offerings linked to Coinbase and Crypto.com, have faced pushback from state regulators claiming the products amount to unlicensed gambling.
Selig also said the CFTC withdrew a September staff advisory that warned firms facilitating sports event contracts to prepare for litigation and state-level enforcement actions.
He said the agency will now work toward a clearer event contracts framework that promotes responsible innovation while reducing regulatory uncertainty for market participants.