Chairman Michael Selig rejected the 2024 rule as a politically inspired overreach and directed staff to start drafting a brand new event contracts framework grounded within the Commodity Exchange Act.
The agency called the 2024 rule a “frolic into merit regulation” and stated that it will follow new policy making grounded within the Commodity Exchange Act to offer clarity for prediction marketplace operators.
Commodity Futures Trading Commission Chairman Michael S. Selig has officially withdrawn a 2024 notice of proposed policy making that could have banned political, sports activities and war-associated events contracts, noting the clearest signal but that the agency seems to manage prediction markets instead of restrict them.
The agency also cancel CFTC Staff Letter 25-36, a September 2025 advisory that had warned regulated entities to exercise caution when facilitating sports-associated events contracts because of continuing litigation. In the comments following the decision, Selig stated:
“The 2024 events contracts proposal demonstrated the earlier administration’s frolic into merit regulation with an outright prohibition on political contracts ahead of the 2024 presidential election.”
The CFTC does now not looks to publish final regulations underneath the withdrawn proposal, as per the press release.
Despite, the commission will advance a latest policy making framework presented in the Commodity Exchange Act, targeting to establish clean standards for event contracts and offer legal surety for exchanges and intermediaries.
Selig Frames Withdrawal as First Step Toward Comprehensive Event Contracts Policy making
The declaration follows remarks Selig presented on January 29 at a joint CFTC-SEC harmonization event beside Securities and Exchange Commission Chairman Paul Atkins. As reported, Selig used his first public speech as chairman to overview a broader reset of the agency’s approach to prediction markets.
“For too long, the CFTC’s present framework has proven hard to apply and has failed our marketplace participants,” Selig stated. “That is something I looks to correct by forming clear standards for event contracts that offers surety to market participants.”
Selig also directed staff of reassess the commission’s participation in awaiting federal court cases where jurisdictional inquiry are at problem, signaling that the CFTC may set in to guard its only authority over commodity derivatives.
Prediction Market Platforms Navigate Increasing Growth and State-Level Legal Battles
The withdrawal reaches as prediction markets experience fast enlargement and strengthening regulatory friction. Merged trading volumes on Polymarket and Kalshi, the two largest platforms, got to $37 billion in 2025, drawing in primary exchanges eager to compete.
Coinbase released prediction markets by a partnership with Kalshi, a federally regulated assisted contract marketplace, in late January. Polymarket returned to the U.S. market in December after getting CFTC no-action relief, and Gemini secured a designated contract market license for its Titan platform.
Meanwhile, state gaming regulators have pushed back. Nevada filed a civil enforcement action against Coinbase this week, claiming that event contracts tied to sports constitute unlicensed gambling. Coinbase has sued regulators in Michigan, Illinois and Connecticut over comparable claims.
The NCAA has also urged the CFTC to halt college sports prediction trading, warning that the sector exposes student-athletes to integrity risks and operates outside state-level safeguards.
Selig, who was into sworn in on December 22, has no longer provided a organization timeline for the brand new policy making, however positioned event contracts as a concern along the agency’s broader “Project Crypto” initiative with the SEC.
