CFTC Plans to Develop Updated Regulations for Prediction Markets, Chairman States

CFTC to Establish New Guidelines for Prediction Markets

Photographer: Ting Shen/Bloomberg

The Commodity Futures Trading Commission (CFTC), Wall Street’s primary derivatives regulator, is set to introduce fresh regulations for the rapidly expanding prediction markets sector, according to an announcement made Thursday by Chairman Michael Selig.

“We need to provide transparent regulations and demonstrate that the CFTC encourages legal innovation within these markets,” Selig stated in his prepared comments. “In line with my ongoing support for responsible progress in crypto asset markets, I remain committed to advancing the development of event contract markets in a responsible manner.”

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Platforms such as Polymarket and Kalshi Inc. enable users to trade on the outcomes of a variety of future events, ranging from potential US government shutdowns to predictions about Oscar winners. Despite resistance from certain state gambling authorities, activity on these platforms has seen significant growth.

In 2024, under previous Chairman Rostin Behnam, the CFTC proposed a ban on prediction market bets related to sports and politics. On Thursday, Selig announced plans to formally retract both that proposal and a 2025 staff advisory that had warned companies against offering sports-related contracts due to ongoing legal disputes.

“Although the advisory was intended to highlight ongoing litigation, it has instead led to confusion within our markets,” Selig explained.

Selig assumed leadership of the CFTC in December. He made these remarks during a panel discussion on cryptocurrency regulation, which also featured SEC Chairman Paul Atkins.

This article has been updated with further information beginning in the fourth paragraph.

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