CFTC Eases Reporting for Fully Collateralized Prediction Markets

The Commodity Futures Trading Commission’s market and clearing divisions on Wednesday issued no-action relief for fully collateralized event contracts traded on CFTC-regulated venues.

The divisions will not recommend enforcement against designated contract markets, derivatives clearing organizations or their participants for failing to comply with specified swap-related recordkeeping requirements or for failing to report covered transactions to swap data repositories while the exceptions are in effect.

Event contracts on prediction markets are technically treated as swaps because they settle on binary outcomes. The divisions wrote that many event contracts listed by DCMs share features with futures and options on futures and that firms may report certain contracts directly to the CFTC rather than through swap data repositories.

The letter named 19 platforms as examples, including Kalshi, Polymarket and Gemini Titan, and noted other firms that list similar contracts may request individual no-action letters from the agency.

CFTC staff indicated the relief responds to numerous requests from DCMs and DCOs that list and clear event contracts and that the agency expects additional requests for similar relief.

The action comes amid a federal-state dispute over regulation of event contracts. The CFTC has sued five states — Wisconsin, New York, Arizona, Connecticut and Illinois — seeking to confirm federal authority over prediction markets. The agency filed an amicus brief in the Sixth Circuit after Ohio ordered Kalshi to stop offering sports event contracts in that state.

Kalshi sued Ohio officials in October 2025 seeking to block state enforcement. A lower court denied the company’s motion in March and Kalshi has appealed.

In March the CFTC issued a staff advisory classifying event contracts as a financial asset class and proposed a rule to expand its regulatory authority. The agency reported receiving more than 1,500 public comments on the proposed rule. Comments included requests from some state regulators for tighter restrictions and support from industry backers such as venture firm a16z.

The divisions stated they will not recommend enforcement while the specified reporting and recordkeeping exceptions are in effect.

CFTC Chair Michael Selig has asserted the agency holds “exclusive jurisdiction” over prediction markets.