The CFTC announced new rules for prediction markets like PolyMarket and Calcci

The U.S. Commodity Futures Trading Commission (CFTC) is preparing to set new rules for prediction markets, as platforms like Polymarket and Kalshi attract billions of dollars of activity by allowing traders to bet yes or no on everything from politics to pop culture.

In his first public comments as head of the CFTC on Thursday, Michael Selig said the agency would move toward clearer standards for event contracts, a category that the CFTC has overseen for more than two decades.

“It’s time to establish clear rules and understand that the CFTC supports legal innovation in these markets,” Selig said in prepared remarks. “In line with my commitment to promoting responsible innovation in crypto-asset markets, I will continue to support the responsible development of event-driven contract markets. »

PolyMarket stands out as a liquidity platform for real-time politics and events

Prediction markets have seen a significant increase in visibility as cryptocurrency platforms and U.S.-regulated companies compete to attract traders seeking continuous exposure to information around the clock.

PolyMarket, in particular, has achieved significant liquidity in politics and news, with some markets attracting tens or even hundreds of millions of dollars in trading volume.

Selig framed his broader agenda as an effort for regulatory clarity and coordination among agencies, positioning the CFTC as a forward-looking regulator capable of adapting rules without freezing innovation.

He also used his speech to put a pro-innovation spin on cryptocurrency market oversight, describing this moment as a historic opportunity to modernize how the United States regulates digital finance.

“Today marks the beginning of a new chapter for the CFTC,” he said, adding that the agency will focus more of its efforts on “regulatory clarity, interagency coordination and open innovation.”

Event contracts are about to have formal rules

He said he was working with the SEC on Project Crypto, an effort he described as a way to ensure consistency in federal oversight by clarifying jurisdictional boundaries, reducing fragmentation and establishing clearer classification of crypto assets.

“Thanks to President Trump’s leadership, Operation Chokepoint 2.0 is a thing of the past, enforcement regulation is complete, the GENIUS Act is in effect, Congress is poised to pass market structure legislation, and the United States is now the cryptocurrency capital of the world,” Selig said.

Specifically regarding prediction markets, he explained the immediate steps that precede a complete overhaul. He said he had asked staff to withdraw a proposed 2024 event contract rule that would have banned political and sporting event contracts, as well as a 2025 staff directive that warned registrants against offering sporting event contracts in light of lawsuits.

“Second, looking to the future, and in the spirit of markets moving according to expectations, I have directed the CFTC staff to move forward with drafting rules for event-driven contracts,” he said, arguing that the current framework has proven difficult to implement and has left market participants operating with too little certainty.

He also said the agency would reevaluate its involvement in the ongoing litigation and work with the SEC on a common interpretation relating to Title VII definitions, with the goal of drawing clearer lines between commodity and security options, CFTC-regulated swaps, and SEC-regulated security swaps.

These measures come against a backdrop of increased activity, even as some national gambling regulators oppose the spread of event trading. For the CFTC, Selig’s message was that prediction markets were no longer niche products and that the next phase would depend on Washington’s ability to create rules that would keep these contracts in the United States, legal and easier to trade.

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