Just-In: US CFTC To Propose New Prediction Market Rules For Polymarket, Kalshi & Others

The U.S. Commodity Futures Trading Commission (CFTC) is looking to propose new rules for prediction markets. The US CFTC’s decision could change things for Polymarket and Kalshi, which are the most prominent prediction markets in the country.

US CFTC Eyes New Rules To Govern Prediction Markets

Prediction markets enable people to wager on the probability of a future event, from elections to economic reports to sports results. Over the last few years, there has been a lot of growth in the sector. Along similar lines, platforms like Kalshi and Polymarket are reporting massive trading volumes and visibility.

The US CFTC’s proposal would establish a framework for assessing event contracts, rather than sweeping bans on types of contracts, a report in The Wall Street Journal stated. The agency would also spell out criteria to decide if some provisions fit the public interest.

This move comes on the heels of regulatory action against Polymarket and Kalshi. Recently, the U.S. House panel launched a probe into insider trading on these platforms.

The US CFTC’s proposed rules may impact marketplaces associated with political, economic, and other “real world” events. For context, Polymarket has emerged as the world’s biggest crypto-based prediction market. Moreover, Kalshi is a federally-regulated exchange in the United States.

Some sports-related contracts will be given priority under the new US CFTC guidelines to be proposed. These include settlements related to player injuries, and very specific in-game events Moreover, the new framework might make these contracts subject to further review.

What Will Happen To Political Contracts On Prediction Markets?

On the other hand, contracts regarding war, terror or political assassinations would probably be considered as problematic from the regulators’ perspective. For these event contracts, the US CFTC is considering grounds of public interest.

The US CFTC’s proposal does not call for outright bans but instead places a greater emphasis on a case by case review process. With this method, the agency would have the flexibility to evaluate new products as the prediction market continues to grow. Moreover, the timing of this move is critical as prediction markets like Polymarket continue to face heat in South Korea and other jurisdictions.

U.S. President Donald Trump last month stated in his Truth Social post that the US CFTC’s exclusive control of the regulation of prediction markets was “critically important.”

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