CFTC Proposes Rules Allowing Sports Prediction Markets

⏱ 4 min read

The Commodity Futures Trading Commission moved on June 10, 2026 to formally allow sports "trading" on federally regulated prediction markets, releasing a 267-page Notice of Proposed Rulemaking that would let platforms like Kalshi and Polymarket keep offering moneyline-, spread-, and player-prop-style contracts nationwide.

The proposal, issued under CFTC Chairman Michael Selig, sets out a three-part test for which sports event contracts pass a "public interest" review and which get blocked outright — including bans on single-play bets, officiating and injury markets, and contracts on pre-collegiate games. The agency now opens a 90-day public comment period before any final rule takes effect.

What the CFTC Actually Proposed

On Wednesday, June 10, the CFTC published its first-ever Notice of Proposed Rulemaking (NPRM) on prediction markets, aiming to amend CFTC Regulation 40.11 and add a new appendix governing how exchanges list "event contracts." The filing introduces a structured, three-step framework: first, determine whether a product is an event contract at all; second, check whether it falls into a category federal law restricts — gaming, war, terrorism, assassination, or unlawful conduct; third, assess whether the contract is "contrary to the public interest."

Chairman Michael Selig, the CFTC's sole sitting commissioner after his appointment by President Trump, framed the move as bringing order to a fast-growing market rather than restricting it. He has previously described traditional sportsbooks and prediction markets as fundamentally different models, noting that licensed casinos can limit winning bettors in ways exchanges cannot.

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What's Allowed vs. Banned

The proposal explicitly greenlights contracts tied to final scores, point differentials, win-loss results, tournament advancement, and individual or team statistical performance — effectively the moneylines, spreads, totals, and season-long player props that mirror standard sportsbook markets. Several categories are carved out as off-limits or likely to be rejected:

• Single in-game plays — a specific pitch, shot, or foul by a named player or team
• Physical fights during games, player injuries, and officiating decisions
• "Pre-collegiate" events, such as high-school games
• Contracts "involving terrorism, assassination, or war," cited as national-security risks
• Pure-chance casino games like roulette — though skill-influenced formats such as poker tournaments may still qualify

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Why This Matters for Sportsbooks

For licensed operators, the stakes are existential to the competitive landscape. Prediction markets currently operate under federal CFTC oversight rather than state gaming licenses, meaning no state betting tax, no state responsible-gambling mandates, and none of the geofencing or self-exclusion infrastructure that commercial sportsbooks must maintain. If the rule is finalized largely as proposed, it would give federal cover to a parallel sports-wagering channel that competes directly with state-licensed books on price and product — without the licensing costs.

The table below frames how the two models would likely compare if this framework holds.

Dimension	State-Licensed Sportsbooks	CFTC-Regulated Prediction Markets
Regulator	State gaming commissions / tribal compacts	Commodity Futures Trading Commission
Player props	Allowed where state law permits	Season-long stats allowed; single-play props banned
State betting tax	Applies (varies by state)	Not applicable under current model
Responsible gambling rules	State-mandated (self-exclusion, limits)	Not state-mandated
Market access in non-betting states	Restricted to legal states	Potentially nationwide

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Industry Reaction

The American Gaming Association, which represents the commercial casino industry, has argued that prediction markets offer gambling outside the state and tribal frameworks designed to protect consumers, bypassing licensing, taxation, and voter-approved rules. A Kalshi spokesperson said the company is still reviewing the notice; Polymarket and the Coalition for Prediction Markets did not immediately respond to requests for comment, according to Axios.

Multiple state regulators and tribal gaming authorities continue to challenge prediction markets' sports contracts in court, arguing they amount to unlicensed sports betting. Nevada has taken action against Kalshi over marketing claims, and observers across the industry expect the broader jurisdictional fight to ultimately reach the Supreme Court.

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What's Next

The CFTC will accept public comments on the NPRM for 90 days before considering a final rule. Stakeholders expected to weigh in include exchange operators, commercial casino and sportsbook groups, professional sports leagues, and state attorneys general. Until a final rule is adopted, prediction markets continue operating under Selig's earlier withdrawal of the 2024 proposed event-contract ban and the 2025 advisory that had cautioned registrants about sports-related contracts — meaning the current, largely permissive status quo persists through the comment period.

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Sources

Reporting and primary filings reviewed for this story:

The conventional sportsbooks and casinos are entertainment, and they have a lot of authority to be able to kick people out when they keep winning.

— Michael Selig, Chairman, Commodity Futures Trading Commission · Interview with Axios, May 2026