The CFTC released Notice of Proposed Rulemaking No. 9249-26 on 10 June 2026, opening a 45-day public comment period. The proposal sits at the proposed rulemaking stage and would, once finalized, amend CFTC Regulation 40.11 and add Appendix F to Part 40. The NPRM addresses one component of a broader advance notice of proposed rulemaking on prediction markets the CFTC published in March 2026 as Press Release 9194-26; additional rulemakings may follow from that advance notice.
The statutory basis is Section 5c(c)(5)(C) of the Commodity Exchange Act, which directs the CFTC to prohibit event contracts involving terrorism, assassination, war, gaming, or activity unlawful under state or federal law where those contracts are contrary to the public interest. The NPRM proposes a three-part sequential test: the contract must settle on an event that either occurs or does not occur; it must involve one of the enumerated statutory categories; and the commission must affirmatively find the contract contrary to the public interest. For that third step, proposed Regulation 40.11 and Appendix F to Part 40 provide a multi-factor analysis covering hedging and price-discovery utility, potential to encourage illicit behavior, and harm to named policy concerns, with a 90-day review window per contract.
Designated contract markets hosting prediction market platforms, including Kalshi, Polymarket, and Crypto.com, continue to serve as first-line reviewers under existing exchange certification rules; the NPRM adds a commission-level 90-day review for individual contracts the CFTC selects for scrutiny. Sports event contracts settling on final scores, point differentials, win-loss results, tournament advancement, or season-long statistical performance are preliminarily found consistent with the public interest. Contracts settling on individual plays, injuries, officiating decisions, pre-collegiate events, or in-game physical altercations face a higher likelihood of an adverse public interest determination. Political event contracts are treated as contests rather than gaming and fall outside the enumerated statutory categories subject to 90-day commission review.
The CFTC currently has a single sitting commissioner, Chairman Mike Selig, rather than the five-member bench the Commodity Exchange Act contemplates; legal observers have noted this structural anomaly may expose finalized rules to judicial challenge. The NPRM is narrowly drawn to address the public interest review process for contracts within the enumerated statutory categories and does not resolve broader questions from the March 2026 advance notice, including market structure requirements for prediction market platforms and data-sharing obligations with professional sports leagues. President Trump voiced public support for prediction markets in May 2026, characterizing them as a new form of financial market in which the United States should retain global leadership.
Licentium advises prediction market operators, digital asset exchanges, and derivatives market participants on CFTC compliance, event contract classification, and exchange certification obligations. Operators reviewing the impact of this proposed rulemaking on their contract listings, or clients preparing comment letters before the 45-day comment period closes, are invited to contact our team. Work we undertake includes prediction market regulatory strategy, CFTC event contract classification, designated contract market compliance, derivatives licensing, exchange certification review, and cross-border regulated markets advice.