TLDR The CFTC released a 267-page proposal to create a framework for what types of event contracts prediction market platforms can legally offer. Most sports contracts would be allowed, but micro-bets on single pitches or specific shots may be banned due to manipulation risk. Markets tied to war, terrorism, or assassination are likely to be deemed against the public interest. The proposal opens a 45-day public comment period and builds on an earlier March 2026 notice of rulemaking. The rules mark a major policy shift from the previous administration, which had sought to ban a wide range of political and sports event contracts.
The CFTC released a detailed proposal this week that would set clear rules for what kinds of contracts prediction market platforms like Kalshi and Polymarket can offer to users.
The 267-page document, titled “Prediction Markets; Public Interest Determinations,” was first reported by the Wall Street Journal. It lays out a framework for deciding when an event contract crosses into territory the agency considers against the public interest.
Rather than issuing blanket bans, the CFTC outlines a series of factors the Commission would use to evaluate specific contracts. If a contract fails the public interest test, a registered exchange would not be allowed to list or clear it.
What Would Be Allowed — and What Would Not
Most sports contracts tied to overall game outcomes would pass the test. The CFTC says contracts settling on final scores, tournament results, or season-long stats provide useful price discovery and are hard to manipulate because they depend on the actions of many participants.
However, certain micro-bets are flagged as problematic. The document specifically mentions wagers on the outcome of a single baseball pitch or a specific shot by a specific player. Contracts involving player injuries, officiating decisions, physical