Posted on: June 10, 2026, 12:02h.
Last updated on: June 10, 2026, 12:02h.
- It’s the commission’s first proposed rule specific to prediction markets
- There’s a 45-day public comment period on the matter
- President Trump promised the commission will roll out broader prediction market regulations
In its first proposed rule specific to the fast-growing prediction markets industry, the Commodity Futures Trading Commission (CFTC) is taking aim at some of the most controversial event contracts offered by yes/no exchanges.
Tapping into the Commodities Exchange Act (CEA), the CFTC wants to examine and potentially limit or eliminate prediction markets’ ability to offer event contracts linked to “conduct that is unlawful under federal or state law.” That’s a broad field, but the commission is targeting derivatives tied to terrorism, war and other conduct that isn’t in the public interest.
The Commission has continued to observe growth in the number and variety of event contracts listed for trading by CFTC-registered entities, including contracts referencing sporting events,” said the commission in a statement. “In light of these developments, the proposal would establish a structured framework for evaluating whether such contracts involve an activity enumerated in Section 5c(c)(5)(C) of the Commodity Exchange Act —activity that involves terrorism, assassination, war, gaming, or conduct that is unlawful under federal or state law—and, if so, whether that contract is contrary to the public interest.”
The CFTC’s proposal now enters a 45-day public comment period.
May Be a Small Step in CFTC Asserting Regulatory Authority
The CFTC is the federal agency with regulatory responsibility for prediction markets and it’s looking to assert that authority amid a slew of state-level legal challenges. Moving to clampdown on the most controversial event contracts is one example of the commission’s efforts to make clear it, not the states, has jurisdiction over prediction markets.
The rule proposal unveiled today by the CFTC is also likely part of what President Trump recently promised would be a broader set of prediction market regulations to be authored by the commission in an effort to make clear to the states that yes/no exchanges fall under federal purview.
Trump, who appointed CFTC Chairman Michael Selig, recently excoriated Democrats in some states that are challenging prediction markets in court or, in the case of Minnesota, banning event contracts.
“The CFTC will protect the integrity of our regulated markets without standing in the way of responsible innovation,” said Selig in the statement. “This proposal gives the Commission a durable, transparent framework to identify the contracts Congress directed us to scrutinize while letting legitimate markets move forward.”
How CFTC Rule Could Affect Sports Event Contracts
In March, the CFTC released a Notice of Proposed Rulemaking (NPRM), in which it proposed a process through the commission can define what it describes as “key statutory terms” such as “gaming” and “involve.”
One takeaway is that there are implications for sports event contracts, the derivatives that ushered the prediction markets industry into the spotlight. For the moment, the CFTC appears to be on board with prediction market operators offering derivatives that are akin to traditional sports wagers, but the commission notes it’s monitoring some corners of the sports event contract market.
“Within gaming, the Commission aims to permit contracts settled on aggregate sports outcomes with objective data and integrity infrastructure, while prohibiting pure‑chance games and high‑risk sports‑adjacent designs (e.g., injury, officiating‑only, discrete actions, altercations, pre‑collegiate events),” according the rule.
