CFTC officially withdraws Biden-era proposal to ban sports and political prediction markets.
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David nodded
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The agency called the 2024 rule a “transition to prudential regulation” and said it would pursue new rulemaking based on the Commodity Markets Act to provide transparency for futures market operators.
Commodity Futures Trading Commission Chairman Michael S. Selig has publicly withdrawn a 2024 announcement of legislation that would have banned betting on events related to politics, sports and war, the clearest sign yet that the agency intends to regulate rather than restrict futures markets.
Key Takeaways:
– The CFTC has rescinded both the 2024 event contracts and the 2025 staff advisory that warned companies to stay away from sports-related markets.
– Chairman Selig has rejected the previous ban as a political “rule of thumb” and is determined to build a new rules-based framework.
– The move stalled as Kalshi, Polymarket and Coinbase fought state charges that their sports contracts amounted to unlicensed gambling.
The agency rescinded CFTC Staff Letter 25-36 issued in September 2025, warning regulated entities to exercise caution over the terms of sports-related events due to ongoing litigation. In his comments after the decision, Selig said:
The 2024 event contract proposal mirrors the previous administration's eligibility rule, which banned all political contracts before the 2024 presidential election.
According to the press release, the CFTC does not intend to issue final rules based on the proposal.
Instead, the Commission will promote a new legal framework based on the Commodity Markets Act, which will set clear standards for arrangement contracts and provide legal certainty to brokers and intermediaries.
The emergence of Selig's framework is the first step towards generalization of the convention of events
The announcement follows comments Selig made on Jan. 29 at a joint CFTC-SEC settlement event with Securities and Exchange Commission Chairman Paul Atkins. Reportedly, Selig used his first public speech as chairman to broadly reset the agency's approach to prediction markets.
“For too long, the CFTC's existing structure has proven difficult to implement and has failed our market participants,” Selig said. “This is something I intend to remedy by establishing clear requirements for event contracts that provide certainty to market participants.”
Selig directed staff to review pending federal court cases involving the commission's involvement, indicating that the CFTC could intervene to defend its exclusive jurisdiction over commodity derivatives.
Explore the growing growth and state-level legal battles of prediction market platforms
The release comes amid the rapid expansion of prediction markets and an intensifying regulatory scramble. Combined transaction volumes on Polymarket and Kalshi in 2018 It has reached $37 billion by 2025, which they are keen to compete with.
Coinbase launched its prediction markets in late January in partnership with Kalshi, a federally regulated futures market. Crypto.com recently rolled out its prediction business to an independent platform called OG. Polymarket returned to the U.S. market in December after receiving CFTC no-action relief, and Gemini received a contract market license designated for the Titan platform.
Meanwhile, state game regulators have pushed back. Nevada this week filed a civil enforcement action against Coinbase, claiming that sports-related event contracts constitute unlicensed gambling. Coinbase sued regulators in Michigan, Illinois and Connecticut over similar claims.
The NCAA also urged the CFTC to stop the college sports betting business.
Selig, who was sworn in on Dec. 22, did not provide an exact timeline for the new rule, but he made the terms of the event a priority for the agency's broader “Project Crypto” partnership with the SEC.
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