CFTC withdraws prior event contract rule proposals, legal guidance
Summary
The Commodity Futures Trading Commission (CFTC) has withdrawn a 2025 internal advisory and a 2024 proposed rule on event contracts, signalling a clear shift away from prior caution toward actively supporting prediction market development. Chairman Michael Selig framed the move as promoting “lawful innovation” and said the withdrawn guidance had caused confusion. The Commission plans fresh rulemaking grounded in a new interpretation of the Commodity Exchange Act and may increase its courtroom involvement to defend its jurisdiction over commodity derivatives.
The decision comes as Congress considers new digital-asset legislation that could expand the CFTC’s remit, notably the Digital Commodity Intermediaries Act, which would add definitions, consumer protections, a new registration regime and requirements for SEC-CFTC collaboration — potentially supercharging the CFTC’s role in digital and event-contract markets.
Key Points
- The CFTC withdrew a 2025 internal advisory on prediction markets and a 2024 proposed event-contracts rule, reversing its previous restrictive posture.
- Chairman Michael Selig says the withdrawals support “lawful innovation” and promise a new rulemaking aligned with Congressional intent under the Commodity Exchange Act.
- The CFTC signalled it may intervene in ongoing legal battles over prediction markets to defend its exclusive jurisdiction over commodity derivatives.
- Major legal questions remain: whether the CEA bans sports/event contracts, Congress’s intent when drafting the CEA, and how state and tribal lawsuits will be resolved.
- Pending US legislation, especially the Digital Commodity Intermediaries Act, could significantly expand the CFTC’s authority and resources for regulating digital-asset and related markets.
- For the gaming and betting industries, the shift increases regulatory clarity prospects but also raises the stakes in federal-state-tribal legal conflicts over prediction markets.
Context and relevance
This is a notable regulatory pivot: the CFTC is moving from caution to a proactive stance that could reshape how prediction markets operate in the US. The change matters to operators, investors and legal teams involved in betting, derivatives and digital assets because it affects jurisdictional battles, compliance expectations and potentially the business models of platforms that run event contracts.
It also intersects with wider US policy on digital assets — congressional bills under consideration could arm the CFTC with new powers and funding, accelerating formal oversight of markets that blur the lines between gambling, derivatives and crypto-based products.
Why should I read this?
If you follow betting, prediction markets, crypto or financial regulation — read this. The CFTC’s U-turn changes the playing field: expect smarter rulemaking, possible federal backing in court fights and bigger regulatory teeth if Congress approves new digital-asset laws. Short version: this could make or break a lot of business models, fast.
Author style
Punchy: this is a clear, consequential shift from the CFTC that industry players shouldn’t ignore. If you work in compliance, legal or product for prediction-market or betting platforms, the detail here is essential — we skimmed the legalese so you don’t have to, but it’s worth digging into the original sources below.