Published on: January 30, 2026, 07:52h.
Updated on: January 30, 2026, 07:52h.
- The CFTC is set to overhaul its regulations for prediction markets
- Prediction markets, which fall under the category of derivative trading, are supervised by the CFTC
- This regulatory overhaul signifies a significant advancement for prediction markets dealing in sports and political contracts
Prediction markets have achieved a pivotal breakthrough amidst lawsuits and cease-and-desist actions filed by state attorneys general and gaming regulators against these trading platforms, allowing them to continue offering contracts related to sports.
Prediction markets involve derivative trading under the oversight of the Commodity Futures Trading Commission (CFTC). Platforms such as Kalshi and Polymarket have seen a surge in popularity, especially since they began facilitating trades focused on the outcomes of the 2024 presidential election and ventured into sports trades last year.
State lawmakers and tribal authorities maintain that they possess the exclusive authority to govern sports betting regulations in their territories, asserting that trading on sports events through prediction markets equates to sports gambling.
In response to the legal turmoil, new CFTC Chair Michael Selig, appointed by President Donald Trump in October 2025, announced plans to revise the rules on derivatives to better accommodate the growing prediction markets landscape.
CFTC To Foster Innovation in Prediction Markets
In discussions with Paul Atkins, Chair of the Securities and Exchange Commission, regarding financial innovation, Selig emphasized the importance of addressing prediction markets, known as event contracts by the CFTC.
“These markets have a history, operating within the CFTC’s regulatory framework for over 20 years. Yet, many still perceive them as new or uncertain, which has not only hindered our markets but also the public’s interest,” Selig stated.
“It is imperative to establish clear regulations and affirm that the CFTC endorses lawful innovation within these markets. I have instructed CFTC staff to retract the 2024 rule proposal concerning event contracts, which would prohibit political and sports-related event contracts, alongside the 2025 staff advisory warning registrants about access to sports-related event contracts due to ongoing legal challenges. While the advisory aimed to increase awareness of litigation, it has inadvertently led to confusion in our markets,” Selig elaborated.
Selig further mentioned that he has requested CFTC staff to develop updated regulations regarding event contracts, which could solidify a federal legal basis for prediction markets to offer contracts related to sports and political events.
Potential Advantages for Trump?
Donald Trump’s business ventures are exploring entry into the prediction market arena, spearheaded by his Trump Media and Technology Group. In October, the parent company of Truth Social announced its collaboration with CFTC-regulated Crypto.com to launch Truth Predict.
Truth Predict aims to provide trading opportunities on various contracts, including those related to sports and politics.
“Truth Social users will soon have the capability to trade prediction contracts concerning key events and milestones, such as elections, fluctuations in interest and inflation rates, commodity prices for gold and crude oil, and events across major sports leagues, all utilizing a new platform dubbed ‘Truth Predict.’ Prices will refresh in real-time, enabling users to respond instantly to significant developments,” indicated a statement from Trump Media.
Details surrounding the launch date for Truth Predict remain unclear, while established sportsbooks such as DraftKings, FanDuel, and Fanatics have already initiated their own prediction markets.