On 10 June 2026, the U.S. Commodity Futures Trading Commission issued a Notice of Proposed Rulemaking on event contracts. The rule targets contracts offered on designated contract markets and swap execution facilities. That category includes prediction market platforms offering sports, political, and financial event contracts. The Federal Register published the proposal on 12 June 2026, opening a 45-day public comment period. This is the first CFTC rulemaking addressed specifically to prediction market contracts.
The proposed rule draws authority from the Commodity Exchange Act, 7 U.S.C. § 7a-1. That provision authorises the CFTC to prohibit or limit event contracts found contrary to the public interest. The NPRM sets out a three-part public-interest test for individual contract review. It also establishes a 90-day review period for individual contract submissions. The proposal would categorically prohibit contracts contingent on war, acts of assassination, or other unlawful activities. Sports wagering contracts are explicitly distinguished from games of pure chance and would not be prohibited.
Prediction market exchanges registered as designated contract markets must resubmit existing contracts for review once the rule is finalised. Platforms currently operating under CFTC no-action relief, including Polymarket and Kalshi, must assess their contracts against the three-part public-interest test. Sports-linked event contracts would not be prohibited under the proposed rule. Contracts covering war and assassination bets face mandatory removal on the rule's effective date. State gaming regulators and tribal gaming authorities contesting CFTC jurisdiction over sports contracts may file comments before the comment deadline.
The comment window closes approximately 25 July 2026. Market participants may challenge the three-part test's application to specific contract types on the administrative record. The NPRM does not address every contract category raised in prior CFTC advisory opinions, leaving certain product classes in interpretive uncertainty. State authorities arguing that sports prediction contracts constitute gambling under state law retain the option to seek declaratory or injunctive relief in federal court once the rule is finalised.
Licentium advises clients on prediction market regulatory positioning and CFTC compliance obligations. If this rulemaking affects your operations or product development roadmap, we welcome enquiries. Work we undertake includes prediction market regulatory strategy, Commodity Exchange Act compliance, designated contract market applications, and event contract classification analysis.