On June 10, 2026, the Commodity Futures Trading Commission (CFTC) announced a proposal to establish new regulations for the prediction markets industry. This proposal aims to clarify whether these platforms are considered federally regulated financial markets or state-regulated gambling. The CFTC's 267-page notice outlines the types of event contracts that would be allowed under federal law, as platforms like Kalshi and Polymarket face scrutiny from various regulators.
The CFTC reported that trading volume in federally regulated prediction markets exceeded $25 billion in 2025, indicating a rise in popularity and the variety of events available for trading. The proposal includes provisions for allowing sports-related event contracts, such as wagers on final scores and team performance, while prohibiting contracts tied to specific plays, player injuries, and events like terrorism or war.
CFTC Chairman Michael Selig stated that the agency aims to protect market integrity while fostering responsible innovation. The proposal comes amid ongoing debates about the regulatory status of prediction markets, with critics arguing that they function similarly to sports betting. Utah Governor Spencer Cox has been a prominent opponent, asserting that prediction markets are a form of gambling and vowing to challenge federal regulations in court.
The CFTC has also been involved in disputes with several states attempting to restrict prediction market operations, including legal actions in Ohio, Massachusetts, and Nevada. Additionally, there have been concerns regarding potential insider trading related to prediction markets, with investigations into former Congressman George Santos and allegations involving a U.S. special operations soldier.