CFTC signals sports prediction markets may survive under federal oversight

The U.S. Commodity Futures Trading Commission [CFTC] has proposed a new framework for regulating prediction markets, signaling that sports event contracts may continue operating under federal oversight instead of facing blanket bans.

The proposal, released June 10, introduces a formal process for reviewing event contracts tied to activities listed under the Commodity Exchange Act, including terrorism, assassination, war, gaming, and unlawful conduct.

The filing comes as prediction markets have expanded rapidly across the U.S., especially around sports and political events.

The CFTC said trading volume in prediction markets exceeded $25 billion in 2025.

CFTC proposes case-by-case review system

The proposal would create a structured 90-day review process for determining whether certain event contracts violate public interest standards under federal law.

The agency also proposed new definitions for terms such as “gaming” and “involve,” two concepts at the center of ongoing legal debates over prediction markets.

Rather than banning broad categories of contracts outright, the framework would evaluate markets individually using factors related to market integrity, public-interest concerns, and economic utility.

CFTC Chairman Michael S. Selig said the agency wants to preserve innovation while maintaining oversight of regulated derivatives markets.

“The CFTC will protect the integrity of our regulated markets without standing in the way of responsible innovation,” Selig said in the release.

Sports contracts remain at the center of the debate

One of the most important parts of the proposal is what it does not do.

The filing does not automatically classify sports prediction markets as prohibited gaming activity.

That distinction could have major implications for platforms such as Kalshi and Crypto.com, both of which have faced regulatory pressure over sports-related event contracts.

Several U.S. states have recently challenged sports prediction markets, arguing that they function as unlicensed gambling products.

The CFTC proposal, however, suggests the agency may favor a narrower contract-by-contract review system instead of broad prohibitions.

CFTC pushes back against state-by-state regulation

The filing also strongly defends federal authority over prediction markets.

The proposal argues that the Commodity Exchange Act grants the CFTC exclusive jurisdiction over regulated derivatives markets and warns that state-by-state enforcement could create “a patchwork of 50 state regulations.”

That language reflects growing tensions between federal regulators and state gaming authorities over who should oversee event-based contracts tied to sports and politics.

The proposal additionally acknowledges that prediction markets can provide economic value through information discovery and risk management rather than functioning solely as speculative gambling products.

Prediction markets move closer to mainstream finance

The filing marks one of the clearest signs yet that the CFTC is moving toward a more formalized regulatory structure for the growing prediction market industry.

Instead of attempting to shut down the sector, the proposal suggests regulators are increasingly focused on defining which event contracts can operate within federally supervised financial markets.

Final Summary

• The CFTC proposed a new framework for reviewing prediction market contracts, including sports-related event markets.
• The filing suggests sports prediction markets continue under federal oversight rather than face automatic bans.