The chair of the Commodity Futures Trading Commission, Michael Selig, has outlined a significant change in the agency’s approach to prediction markets, signaling greater regulatory clarity and support for lawful innovation in event contracts.
Speaking during his first public remarks as CFTC chair, he said prediction markets have operated within the CFTC’s regulatory perimeter for more than 20 years but continue to face uncertainty due to fragmented oversight and inconsistent policy signals.
Addressing event contracts directly, the chair said he has instructed staff to withdraw the Commission’s 2024 rule proposal that would have prohibited political and sports-related event contracts, as well as a 2025 staff advisory that cautioned registrants against offering access to sports-related contracts amid ongoing litigation.
He said the advisory, while intended to highlight legal risks, had instead contributed to confusion in the market.
The chair said the CFTC will now move forward with drafting a new event contracts rulemaking, aimed at establishing clearer and more workable standards for prediction markets.
He said: “It is time for clear rules and a clear understanding that the CFTC supports lawful innovation in these markets.”
The planned rulemaking is intended to replace what he described as a framework that has proven difficult to apply in practice and has failed to provide certainty for market participants.
In addition, the chair said the Commission will reassess its participation in ongoing federal court cases involving prediction markets, particularly where jurisdictional authority over commodity derivatives is being challenged.
He also confirmed that the CFTC will work with the Securities and Exchange Commission to develop a joint interpretation of Title VII definitions, with the aim of drawing clearer lines between commodity options, swaps regulated by the CFTC, and security-based swaps overseen by the SEC.
The comments come amid rapid growth in prediction markets tied to sports, elections and economic data, as major trading platforms explore event-based contracts alongside traditional financial products.
In December 2025, Coinbase partnered with Kalshi to launch prediction market trading for US users, allowing contracts linked to sports, elections and macroeconomic events as part of its broader strategy to build an ‘everything exchange’.
The Coalition for Prediction Markets, announced late last year, includes operators such as Coinbase, Robinhood and Underdog, and has been advocating for clearer federal rules governing event contracts
