- The CFTC proposed a framework to review event contracts involving gaming, war, terrorism, assassination, or unlawful activities.
- New rules would introduce a 90-day review period and public-interest criteria for evaluating event contracts.
- Rising prediction market volumes and blockchain-based trading platforms are driving increased regulatory scrutiny.
The U.S. Commodity Futures Trading Commission has opened a new chapter in the prediction markets debate, publishing a proposed rule that would create a formal review process for event contracts tied to activities listed under federal law. The proposal arrives as trading volumes continue rising across prediction markets, with the agency seeking public input on how contracts involving gaming, war, terrorism, assassination, or unlawful conduct should be evaluated.
New Framework For Event Contracts
According to the CFTC, the proposal would amend Regulation 40.11 and add Appendix F to Part 40. The framework would help determine whether an event contract involves activities listed in Section 5c(c)(5)(C) of the Commodity Exchange Act.
CFTC Chairman Michael S. Selig said the proposal aims to provide a transparent process while allowing legitimate markets to continue operating. Notably, the rule would establish a 90-day review period and introduce public-interest factors for contract evaluations.
In addition, the proposal seeks to define statutory terms, including “involve” and “gaming.” The agency said the initiative addresses one specific area of its broader prediction market review launched earlier this year.
Trading Growth Draws Regulatory Attention
The proposal follows fast expansion in prediction market activity. According to previously published figures, Kalshi’s weekly trading volume increased from $300 million to $3 billion between September 2025 and March 2026.
As activity expanded, the CFTC launched an Advance Notice of Proposed Rulemaking on March 12. The notice requested feedback on several topics, including market oversight, manipulation risks, insider trading concerns, public-interest considerations, and blockchain integration.
The comment period closed on April 30. Subsequently, the agency received more than 1,500 submissions from exchanges, blockchain companies, sportsbooks, and other market participants.
Sports Contracts And Blockchain Under Review
Alongside the proposal, the CFTC issued Advisory Letter No. 26-08. The guidance reminded market participants that existing rules against fraud, manipulation, and insider trading apply to event contracts.
Notably, sports-related contracts remain a key area of focus. Regulators continue examining how such products fit within existing market rules.
Meanwhile, blockchain-based platforms have become part of the discussion as event contracts increasingly use decentralized technology for trading and settlement.
The proposal has now moved to the White House Office of Information and Regulatory Affairs for review. As that process continues, the CFTC is gathering feedback on how future oversight of event contracts should operate across regulated markets.
