The CFTC’s proposed prediction market rules have drawn different reactions from trading platforms, gambling groups, states and tribal organisations. The proposal would make the review process clearer for event contracts, including sports markets, while keeping some categories blocked on public interest grounds.
The rules would amend Regulation 40.11 and add a new appendix for event contracts. The CFTC opened the proposal for public comment after rapid growth in sports, election and entertainment contracts on federally regulated platforms.
Sports contracts lead the debate
The proposal treats sporting events as a form of gaming, but it does not automatically treat sports outcome contracts as against the public interest. That could allow prediction market platforms to list contracts tied to scores, spreads, match results and tournament progress.
The CFTC would still review contracts that create manipulation or integrity risks. Markets tied to injuries, officiating decisions, fights, pre-collegiate sports and conduct that could encourage cheating would face stronger barriers.
Platforms welcome federal clarity
Prediction market operators have argued that event contracts are financial products and should be governed through federal commodities law. The proposed framework supports part of that position by giving CFTC-registered platforms a defined review process.
Kalshi, Polymarket and newer entrants have been expanding sports-linked products as user demand grows. A clearer rulebook could help platforms decide which contracts can be listed and which are too risky.
Gambling groups oppose plan
State regulators, tribal gaming groups and sportsbook interests remain opposed to sports event contracts. Their argument is that users are still risking money on sports outcomes, even if the product is structured as a derivatives contract.
The American Gaming Association has criticised the proposal as an attempt to redefine sports betting. Gambling groups also argue that prediction markets could avoid state taxes, licensing fees, responsible gambling rules and tribal compact protections.
Comment period remains open
The proposal is open for public comment until July 27. Prediction market firms, sportsbooks, tribes, state regulators and consumer groups can use that period to push for changes. Regulation 40.11 already allows the CFTC to review event contracts that may involve gaming, illegal activity, terrorism, assassination or war. The new proposal would give exchanges and objectors more detail on how those public-interest reviews should work.
