CFTC RELEASES 267-PAGE PREDICTION MARKETS RULE PROPOSAL COVERING SPORTS AND EVENT CONTRACTS AS BIPARTISAN SUPPORT HOLDS The Commodity Futures Trading Commission released a 267-page proposed rulemaking on Wednesday establishing the first comprehensive federal framework for prediction markets in the United States, pitching a three-part test the agency would apply before banning specific contracts and opening a 45-day public comment period before any rules can be revised or finalized. CFTC Chairman Mike Selig said the agency will protect market integrity without blocking responsible innovation, framing the proposal as a tailored regime for prediction market platforms such as Kalshi and Polymarket. The proposal sets a 90-day review process for evaluating individual contracts against the public-interest standard and would require the CFTC to formally determine that a contract fails all three parts of a public-interest test before banning it. Sports-related contracts, which have driven 80% of Kalshi’s trading volume since July 2024, are subject to specific review, with officiating outcome contracts and player injury bets identified as potentially outside the public interest. The proposal arrives after months of legal and political battles in which several states argued that prediction market contracts constitute sports betting subject to state gambling laws. Minnesota passed a law effective August 1 criminalizing prediction market advertising, prompting both Kalshi and the CFTC to file federal preemption lawsuits in May 2026. President Trump posted in May that maintaining CFTC exclusive authority over prediction markets is “critically important.” The proposal was under White House regulatory review since May 26 before the CFTC released it Wednesday. Combined monthly trading volume on Kalshi and Polymarket grew from under $5 billion in September 2025 to approximately $24 billion in April 2026, according to Pew Research Center data cited in the ESPN report on the proposal. The CFTC is positioned as the primary federal regulator of event contracts through its authority over derivatives under the Commodity Exchange Act. The 267-page proposal is the most detailed governance document the agency has published on prediction markets since withdrawing a 2024 proposed ban under Chairman Selig, who replaced the prior administration’s stance with explicit institutional support for prediction markets. The rule would apply to all CFTC-registered designated contract markets that offer prediction products, including Kalshi, Polymarket, and https://t.co/CkCqkENalm. Finalization of the rule, which requires a notice-and-comment period plus commission vote, is unlikely before late 2026 at earliest.