Prediction Markets Score Major Win With CFTC Planning To Rewrite Trading Rules
Posted on: January 30, 2026, 07:52h.
Last updated on: January 30, 2026, 07:52h.
- The CFTC is planning to rewrite the regulatory rules for prediction markets
- Prediction markets, or event contracts, constitute derivative trading that the CFTC regulates
- The CFTC regulatory rewrite is a major win for prediction markets offering sports and political contracts
Prediction markets have secured a major victory in their quest to continue offering contracts involving sports, as state attorneys general and gaming regulators file lawsuits and issue cease-and-desist orders against the trading platforms.
Prediction markets run derivative trading regulated by the Commodity Futures Trading Commission (CFTC). Platforms like Kalshi and Polymarket have boomed in popularity since they began facilitating trading on the outcome of the 2024 presidential election, and last year, embarking into sports trades.
State lawmakers, as well as tribal nations, say only they have the legal authority to determine sports betting regulations in their jurisdictions. They argue that prediction markets trading sports events constitute sports gambling.
In the wake of the legal mess, new CFTC Chair Michael Selig, who was appointed by President Donald Trump last October, says the rules on derivatives will be rewritten to accommodate the emerging prediction markets space.
CFTC To Support Prediction Market Innovation
During a conversation with Securities and Exchange Commission Chair Paul Atkins regarding finance innovation, Selig said he “would be remiss” if he did not address prediction markets, or event contracts as the CFTC calls them.
“These markets are not new. They have operated within the CFTC’s regulatory perimeter for more than two decades. But, despite their history, many view them as novel or unsettled. That uncertainty has not served our markets well, nor has it served the public interest,” Selig said.
It is time for clear rules and a clear understanding that the CFTC supports lawful innovation in these markets. I have directed CFTC staff to withdraw the 2024 event contracts rule proposal that would prohibit political and sports-related event contracts and the 2025 staff advisory, which cautioned registrants about offering access to sports-related event contracts due to ongoing litigation. While the advisory was issued at the staff level with the intent of bringing awareness to the litigation, it has instead contributed to uncertainty in our markets,” Selig explained.
Selig added that he’s directed CFTC staff to draft updated event contracts rulemaking, which is expected to solidify a federal legal footing for prediction markets to offer contracts on events involving sports and politics.
Trump Benefit?
Trump’s business empire is pursuing a prediction market entry through his Trump Media and Technology Group. Last October, the parent entity of Truth Social announced a partnership with CFTC-regulated Crypto.com to launch Truth Predict.
Truth Predict plans to offer trading on various contracts, including sports and politics.
“Truth Social users will be able to trade prediction contracts related to major events and milestones, such as political elections, interest and inflation rate changes, commodity prices on gold and crude oil, events across all major sports leagues, and more, using the new product technology called ‘Truth Predict.’ Prices will update in real-time, allowing users to react instantly to developments in major current events,” a release from Trump Media read.
It’s unclear when Truth Predict might launch. Leading sportsbooks, including DraftKings, FanDuel, and Fanatics, have already launched prediction markets.
No comments yet