New rules are to be drawn up in the regulating of sports-event contracts within the prediction market sector, the new chair of the Commodity Futures Trading Commission (CFTC) Michael Selig has confirmed.
Speaking at a CFTC and Securities and Exchange Commission (SEC) Harmonization joint event in Washington D.C, he also confirmed a previous proposal to ban sports-event contracts will also be scrapped, who says the pending rule has “contributed to uncertainty in our markets.”
Intervention comes as Kalshi, Polymarket face mounting legal pressure
A 2025 advisory urging prediction markets to exercise caution over offering sports contracts has also been rescinded, according to Selig, as both the prediction market industry encounters increasing legal battles in states across the U.S.
The consternation around both Kalshi and Polymarket comes from state-level lawmakers. It concerns the ability for individuals to wager money on the outcome of sports events and the lack of local or federal oversight concerning that practice.
“Where jurisdictional questions are at issue, the Commission has the expertise and responsibility to defend its exclusive jurisdiction over commodity derivatives”, Selig said, intimating the CFTC would consider involving itself in federal lawsuits if pushed.
“As the new frontier of finance descends upon us, regulators must relentlessly modernize, harmonize, and future-proof their approach to regulation. But we must not abandon our age-old principles, like investor protection, anti-fraud and anti-manipulation, and market integrity, which remain our North Star,” he added.
News welcomed by industry body
The news was positively received by the Coalition for Prediction Markets (CPM), a national alliance formed in December 2025 by Kalshi and Crypto.com.
A spokesperson for the group said: “By withdrawing uncertain guidance around sports-event contracts and committing to undertake comprehensive rulemaking, the Commission takes a key step to foster market clarity, responsible innovation, and trust in American markets,
It had been a rough few months for the sector, which was embroiled in several legal cases across more than 15 states across the U.S.
Prediction markets still face state scrutiny
At the time of writing, Polymarket and Kalshi alone have 17 separate cases against them across several states.
In Tennessee, the Sports Wagering Council ordered platforms including Kalshi, Polymarket, and Crypto.com to halt sports-event contracts for residents and refund customer funds, claiming the offerings amounted to illegal wagering under state law.
Kalshi challenged the order in federal court and obtained a temporary injunction, arguing the contracts fall under CFTC regulation, highlighting the growing tension between state authorities and federally regulated derivatives markets.
New York has also emerged as a hotspot, with Kalshi facing a class action alleging unlawful and deceptive practices in its sports-related contracts.
Plaintiffs argue the platform operated as an unlicensed gambling service, while Kalshi maintains federal oversight under the Commodity Exchange Act protects its operations. The case underscores how states are exploring civil and regulatory avenues to curb prediction markets even when platforms assert federal preemption.
Other states, including Nevada, Maryland, and Massachusetts, have similarly moved to restrict or litigate against prediction markets, issuing cease-and-desist orders or pursuing enforcement under local gaming laws.
Courts have been split on whether state regulations apply, creating a patchwork of legal uncertainty. The outcomes of these cases are poised to shape the future of prediction markets nationwide, balancing state-level gambling protections against federally regulated financial innovation.
No prediction market adverts during NFL Superbowl
The NFL has decided to block commercials for sports prediction markets from airing during Super Bowl LX on February 8, 2026, even as traditional sportsbooks continue to advertise around the broadcast. The move prevents event‑contract platforms from reaching the massive national audience the game provides, at a moment when trading-style sports markets are rapidly expanding.
The restriction comes from the league’s Super Bowl advertising guidelines, which specifically prohibit prediction market promotions. Sportsbook ads, however, remain eligible under current rules. While the national telecast will remain free of such marketing, local broadcast affiliates control certain regional ad slots, meaning prediction market platforms could still appear in some markets outside the main feed.
The NFL’s caution is driven by concerns over integrity and oversight. League officials have expressed skepticism about sports-event contracts, noting they often lack the robust safeguards and monitoring expected from licensed wagering operations.
Last December, the NFL’s Washington lead publicly urged Congress and the CFTC to tighten oversight of these contracts. Unlike other sports leagues that have partnered with prediction platforms, the NFL is taking a wait-and-see approach, holding off until legal and regulatory standards are clearer before allowing these ads during its marquee event.
