CFTC proposes first rules for prediction markets

The CFTC proposes its first rules for prediction markets, including a 90-day review and criteria for contracts, impacting platforms like Kalshi and Polymarket.

The U.S. Commodity Futures Trading Commission (CFTC) has released its first formal proposal to regulate prediction markets. This move aims to provide much-needed clarity for platforms such as Kalshi, Polymarket, and Crypto.com, which have operated in a largely uncertain legal environment. The proposal introduces a 90-day review process and a three-part test to assess whether certain contracts should be prohibited, especially those that may be considered contrary to the public interest. Notably, the CFTC appears open to allowing some sports-related markets, though legal ambiguities persist due to the agency currently lacking commissioners. This initiative is designed to protect market integrity and foster responsible innovation. It marks a significant milestone for an industry that has grown in prominence through contracts linked to politics, sports, and other real-world events.