CFTC to write new rules for prediction markets, chairman Michael Selig says | Yogonet International
Summary
The Commodity Futures Trading Commission (CFTC) will draft new, clearer rules for prediction markets, CFTC Chairman Michael Selig announced. He said the agency is withdrawing a 2024 staff proposal that would have banned contracts tied to sports and political events and rescinding a 2025 staff advisory about sports-related contracts.
Selig framed the move as an effort to reduce regulatory uncertainty, support lawful innovation in event-based contracts, and defend the CFTC’s jurisdiction over federally regulated derivatives. He also signalled closer coordination with the SEC on oversight of crypto assets, credit swaps and other emerging instruments.
Key Points
- The CFTC will create explicit rulemaking for event-based prediction markets to replace uncertain staff guidance.
- Chairman Michael Selig ordered withdrawal of a 2024 proposal that would have banned sports and political contracts and rescinded a 2025 advisory on sports contracts.
- Prediction platforms such as Kalshi and Polymarket have expanded rapidly and prompted scrutiny from state regulators and tribal authorities.
- The CFTC may intervene more actively in federal court to assert its exclusive jurisdiction over commodity derivatives.
- Selig pledged increased coordination with the SEC on oversight, while emphasising investor protection, anti-fraud enforcement and market integrity.
- The Coalition for Prediction Markets welcomed the move as promoting clarity and responsible innovation.
- These remarks are Selig’s first public comments since becoming CFTC chairman.
Context and Relevance
Prediction markets straddle finance, gambling and emerging crypto-based products, creating jurisdictional tension between federal regulators, states and tribal nations. The CFTC’s decision to pursue formal rulemaking rather than ad-hoc staff guidance could reshape what products are permitted, who regulates them and how operators design offerings.
For market operators, legal teams and regulators, this announces a shift from uncertainty to a potential standard regulatory regime — affecting product launch strategies, compliance costs and litigation risk.
Author style
Punchy: this isn’t just a policy tweak — it signals the CFTC intends to set the ground rules for an industry that has grown faster than its legal framework. If you work with or invest in event contracts, you should pay attention.
Why should I read this?
Short and plain: if you build, run or regulate prediction markets (or just follow the betting/derivatives space), this could change what you can offer and who signs off on it. We’ve read the dry bits so you don’t have to — this tells you the direction regulators are taking and why it matters now.