CFTC scraps Biden-era proposal to ban political event contracts as states press prediction markets
The CFTC withdrew a proposal banning political event contracts, signaling a new rulemaking approach amid state-level regulatory pressure on prediction markets.Summary
The U.S. Commodity Futures Trading Commission (CFTC) has withdrawn its 2024 proposal that aimed to ban contracts tied to political events, reversing a late Biden-era initiative. CFTC Chairman Michael S. Selig stated the previous proposal represented a "merit regulation" approach and announced the commission will pursue new rulemaking based on a "rational and coherent interpretation" of the Commodity Exchange Act. This decision comes as prediction markets face increasing regulatory scrutiny at the state level, exemplified by Nevada's gaming regulator filing a complaint against Coinbase over alleged unlicensed sports betting via event contracts. Industry participants, including Coinbase, argue that Congress granted the CFTC exclusive jurisdiction over these federally approved contracts, setting up a jurisdictional conflict with state gaming statutes. The CFTC's shift also follows prior legal victories for platforms like Kalshi concerning election-related contracts.
(Source：The Block)