The Commodity Futures Trading Commission is moving forward with a proposed rulebook for prediction markets. The proposal, which entered review at the White House Office of Management and Budget around May 26-27, would allow most sports betting contracts under federal oversight while cracking down on manipulation and fraud.
This is a full reversal of a 2024 ban on various sports-related event contracts, replacing prohibition with regulated permission. Platforms like Kalshi and Polymarket, which have spent years navigating a patchwork of state laws and federal uncertainty, now have a clearer path forward.
Federal authority takes center stage
President Trump publicly endorsed the CFTC’s exclusive federal authority over prediction markets in a Truth Social post on May 26. His remarks emphasized the need to prevent state-level interference and maintain a competitive edge against international prediction market platforms.
The proposed framework builds on an Advance Notice of Proposed Rulemaking issued by the CFTC back in March 2026. That earlier document sought public comments on how event contracts should operate, with particular attention to insider trading and fraud risks. The comment period closed on April 30.
