CFTC proposes 90-day review for U.S. prediction markets

On June 10 the Commodity Futures Trading Commission published a Notice of Proposed Rulemaking, Release No. 9249-26, that would set a 90-day review process for event contracts that may involve terrorism, war, assassination, gaming or other activities restricted by federal law.

The proposal amends Regulation 40.11 and adds a new Appendix F to Part 40. Under the draft rule, a CFTC-registered exchange that files an event contract potentially covered by Section 5c(c)(5)(C) of the Commodity Exchange Act would trigger a 90-day agency review. The Commission would apply a set of public-interest factors and determine two points: whether the contract “involves” one of the enumerated activities and whether approving the contract would be contrary to the public interest. The draft text includes definitions for contested terms such as “involve” and “gaming.” The NPRM is narrower than an earlier Advance Notice of Proposed Rulemaking on prediction markets published in March 2026.

CFTC Chairman Michael S. Selig described the proposal as giving the agency “a durable, transparent framework to identify the contracts Congress directed us to scrutinize while letting legitimate markets move forward.” He framed the approach as a way to protect market integrity while permitting responsible innovation.

The Federal Register notice opens a public comment period expected to run between 30 and 90 days. Market participants, legal advisers and academics are expected to focus on the definitions of “gaming” and “involve” and on how the Commission will weigh the public-interest factors. Once the framework is finalized, registered exchanges are expected to submit new contract filings for review under the 90-day timeline.

The proposal replaces an earlier, broader regulatory approach the CFTC advanced in 2024 that would have defined “gaming” more widely. That 2024 proposal drew criticism and was withdrawn in February 2026. The June 10 NPRM provides a case-by-case review process rather than categorical prohibitions.

Registered U.S. platforms such as Kalshi are likely to face a more predictable approval path for standard sports-outcome markets and other straightforward contracts. Highly specific micro-bets and contracts that raise manipulation or insider-information risks would receive closer scrutiny. Crypto-native and offshore platforms that operate outside CFTC registration, such as Polymarket, would be affected indirectly; the proposal outlines a preference for a supervised domestic prediction-market framework but does not change the jurisdictional status of offshore operators.

Section 5c(c)(5)(C) was added to the Commodity Exchange Act by the Dodd-Frank Act of 2010 to bar markets that would let participants profit from catastrophic events or function as substitutes for gambling. At the time, lawmakers cited concerns about markets tied solely to sporting outcomes and other contracts with no commercial purpose.

After the comment period the Commission may revise the proposal or issue further rulemakings related to the March 2026 Advance NPRM. Registered exchanges and other market operators are expected to monitor the rulemaking and prepare filings under the new review timeline.