CFTC Unveils First Regulatory Framework for Prediction Markets on Sports and Elections

The Commodity Futures Trading Commission published new rules on June 10 that establish the first clear regulatory framework for prediction markets like Kalshi and Polymarket. The proposal distinguishes between event contracts with economic purpose—such as sports and election outcomes—and games based purely on chance, potentially removing legal barriers for these platforms. Sports contracts tied to final results or performance statistics may no longer be automatically considered contrary to the public interest, while election contracts are clarified as not gambling under federal law.

The framework could significantly reshape how prediction market operators structure their offerings, though each contract will still require CFTC approval based on a public interest test. Both platforms have already moved closer to traditional finance, with Polymarket integrating real-time data into Dow Jones properties including The Wall Street Journal.