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It appears the Commodity Futures Trading Commission (CFTC) is aiming to make the prediction market regulatory world a little clearer, as it has withdrawn a draft rule that would have restricted or banned certain event contracts.
It was back in 2024 when the CFTC issued a proposal on event contracts which would see event contracts involving political contests defined as gaming.
Now, the commission has done a U-turn as it states it “has withdrawn the notice of proposed rulemaking titled ‘Event Contracts’…The CFTC does not intend to issue final rules with respect to the proposal.”
As well as this, a staff advisory has been removed which was initially issued on September 30 2025. Within it, it said: “The Commodity Futures Trading Commission staff today issued an advisory to futures commission merchants, introducing brokers, designated contract markets, derivatives clearing organizations, and registered futures associations about certain contract markets regarding preparations with respect to potential market disruption during a lapse in government appropriations.”
CFTC Chairman Michael S. Selig speaks about prediction market changes
Speaking on the changes, CFTC Chairman Michael S. Selig said: “Today’s actions reflect the CFTC’s commitment to lawful innovation in our markets.
“The 2024 event contracts proposal reflected the prior administration’s frolic into merit regulation with an outright prohibition on political contracts ahead of the 2024 presidential election.
“The Commission is withdrawing that proposal and will advance a new rulemaking grounded in a rational and coherent interpretation of the Commodity Exchange Act that promotes responsible innovation in our derivatives markets in line with Congressional intent.”
He also commended the staff’s withdrawal of the more recent sports event contracts advisory note. “While intended to highlight litigation considerations, the advisory inadvertently created confusion and uncertainty for our market participants” Chairman Selig said. “I look forward to working with staff on an event contracts rulemaking.”
This news comes shortly after Michael Selig said it was time for “clear rules” around prediction markets, with the industry likely being the first to appreciate this new move.
Featured Image: CFTC / Canva
