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US CFTC Withdraws Proposal to Ban Event Contracts in Prediction Markets

US CFTC Withdraws Proposal to Ban Event Contracts in Prediction Markets

The U.S. CFTC reversed a 2024 Biden-era plan targeting political event contracts and also pulled back a 2025 advisory on sports-related markets, signaling a softer federal stance toward prediction platforms.

Fact Check
The statement is assessed as highly likely to be true based on overwhelming and authoritative primary source evidence. Multiple official publications from the CFTC, including a direct press release and an announcement on its homepage, explicitly state that the agency has "withdrawn" its proposed rulemaking concerning "Event Contracts." These sources are the most credible type possible for this claim, as they originate from the regulatory body that took the action. The evidence is entirely consistent across the most relevant sources, with no contradictions found. While the statement uses the phrase "proposal to ban," and the source material refers to a "proposed rulemaking," the core action of withdrawing the proposal is directly and unambiguously confirmed. The remaining, less relevant sources provide context but do not challenge the primary evidence. Therefore, the central claim of the statement is factually supported by high-quality evidence.
Summary

The U.S. Commodity Futures Trading Commission has withdrawn its 2024 proposal to ban political event contracts in prediction markets and retracted a 2025 advisory warning related to sports-based contracts. The Biden-era proposal had aimed to curb politically sensitive themes amid concerns over the legitimacy of prediction markets, including decentralized platforms. The rollback signals a shift toward a more permissive federal regulatory approach, benefiting operators such as Kalshi and Polymarket, while broader regulatory uncertainty persists as state-level scrutiny continues.

Terms & Concepts
  • Commodity Futures Trading Commission (CFTC): A U.S. federal agency that oversees derivatives markets, including futures, options, and certain event-based or prediction contracts.
  • Event Contracts: Financial contracts that pay out based on the outcome of specific, verifiable real-world events such as elections or sports results.
  • Prediction Markets: Platforms where users trade contracts tied to the outcomes of future events, often used to aggregate collective expectations.