The Commodity Futures Trading Commission's (CFTC) public comment period on proposed prediction market rules closes on 27 July, leaving five days for exchanges, sports leagues, state regulators and traders to influence a framework that will determine which event contracts US platforms can list. The stakes center on sports contracts, which accounted for roughly 87% of the $39.7 billion Kalshi traded in the year to February and 38% of Polymarket's $36.2 billion, according to the Congressional Research Service. The CFTC issued its Notice of Proposed Rulemaking on 10 June and published it in the Federal Register two days later, starting a 45-day clock for the 267-page proposal filed under RIN 3038-AF65.
CFTC Sets 27 July Deadline for Prediction Market Rule Comments
The CFTC's 267-page proposal would amend Rule 40.11 of the Commodity Exchange Act and add a new Appendix F. The proposal establishes a three-step test for any event contract: whether it involves an excluded commodity, whether it touches an enumerated activity such as gaming, terrorism, assassination or war, and whether it is contrary to the public interest. The proposal supplies a working definition of "gaming" and a rule for when a contract "involves" an underlying activity. Comments must be received, not merely postmarked, by 27 July through the CFTC's public comment portal under RIN 3038-AF65.
CFTC Proposal Permits Aggregate Outcomes, Targets Granular Contracts
Contracts settling on aggregate outcomes would largely survive under the proposal. Final scores, point differentials, season-long statistics and tournament advancement are unlikely to be found contrary to the public interest where they rest on objective settlement data and established league integrity frameworks, according to an analysis by law firm Dechert. Contracts on player injuries, officiating decisions, discrete player or team actions, physical altercations and pre-collegiate sports are flagged as likely prohibited on the reasoning that narrow outcomes are ones a single participant can manipulate. The proposal does not ban categories outright but establishes which contracts are likely to be found contrary to the public interest under Rule 40.11.
American Gaming Association Files to Intervene in CFTC Wisconsin Lawsuit
The American Gaming Association, representing the commercial casino and sportsbook industry, moved on 14 July to intervene in the CFTC's suit against Wisconsin, seeking to join the state as a defendant on the grounds that the case could reshape state gaming regulation and the standing of licensed sportsbooks. Wisconsin does not oppose the move. The CFTC does. The CFTC's advance notice in March drew roughly 3,500 comments before closing on 30 April, but only about 300 offered detailed comments and recommendations, with the rest either duplicative or non-substantive, by the commission's own count in the proposal. Tribal gaming groups have urged Congress and the Commission to act before the market expands further. Senate Democrats wrote to Chairman Michael Selig in February arguing that contracts involving gaming, war, terrorism and assassination are already barred by statute.
CFTC Files Suits Against Eight States Over Prediction Market Jurisdiction
The CFTC filed an amicus brief in the Ninth Circuit in February arguing event contracts are swaps under its exclusive authority. Between April and June the commission sued Arizona, Connecticut, Illinois, New Mexico, New York, Minnesota, Rhode Island and Wisconsin to block state enforcement, per a client alert from WilmerHale. The commission also sued Kentucky, arguing state attempts to shut down federally regulated markets intrude on a federal scheme. A finalized rule would strengthen the CFTC's position in jurisdictional disputes with state gambling regulators.
CFTC Reviews Comment File With No Set Finalization Timeline
No statute compels the CFTC to finalize anything on a set timetable. The agency reviews the file, decides whether to adopt, revise or abandon, and issues a final rule when it chooses. The 2024 proposal on the same subject was never finalized and was withdrawn in 2026. The number of event contracts trading on prediction markets rose from roughly 220 in 2021 to more than 8,000 in May, according to the CFTC's own proposal. Prediction markets set records in the second quarter even as crypto spot volume fell 27.9%, and the World Cup drove monthly volume to fresh highs, with Polymarket's tournament winner market alone drawing more than $3.3 billion.
FAQ
What is the deadline for submitting comments on the CFTC's proposed prediction market rules?
The public comment period closes on 27 July. Comments must be received, not merely postmarked, by that date through the CFTC's public comment portal under RIN 3038-AF65.
What types of sports contracts would the CFTC proposal permit?
Contracts settling on aggregate outcomes such as final scores, point differentials, season-long statistics and tournament advancement would largely survive where they rest on objective settlement data and established league integrity frameworks, according to an analysis by law firm Dechert. Contracts on player injuries, officiating decisions, discrete player or team actions, physical altercations and pre-collegiate sports are flagged as likely prohibited.
Which states has the CFTC sued over prediction market jurisdiction?
Between April and June the CFTC sued Arizona, Connecticut, Illinois, New Mexico, New York, Minnesota, Rhode Island, Wisconsin and Kentucky to block state enforcement or argue that state attempts to shut down federally regulated markets intrude on a federal scheme, per a client alert from WilmerHale.
