The only federal regulator that oversees prediction markets says it will ease up on Kalshi and others

"The chairman of the Commodity Futures Trading Commission on Thursday said the agency will rescind its warnings to prediction-market operators - and threatened to fight with state regulators that are trying to stop them. Michael Selig said the commission would yank a 2025 memo issued by three senior CFTC staffers advising prediction markets to have back-up plans if courts scuttled their sports contracts."

""For too long, the CFTC's existing framework has proven difficult to apply and has failed our market participants," he said Thursday, in his first public remarks since taking the reins at the key federal finance regulator. "That is something I intend to fix by establishing clear standards for event contracts that provide certainty to market participants." "Event contracts" is a term to describe the instruments that people trade on prediction markets."

"The memo, he said, "contributed to uncertainty in our markets." He also said he was scrapping a previous rulemaking effort that would have limited prediction markets and is starting over - a process that could take years. He also hinted that the CFTC could intervene in lawsuits where Kalshi and other prediction markets, like the one operated by Crypto.com, are fighting with state regulators."

Michael Selig, chair of the Commodity Futures Trading Commission, announced the agency will rescind a 2025 memo that warned prediction-market operators about sports contracts. The CFTC will scrap a prior rulemaking effort that would have limited prediction markets and initiate a new rulemaking to create clear standards for event contracts, a process that could take years. The memo had advised platforms to prepare backup plans if courts invalidated sports contracts and was said to have contributed to market uncertainty. The CFTC may intervene in lawsuits between platforms like Kalshi and Crypto.com and state gambling regulators. Some states allege prediction markets violate gambling laws while Kalshi asserts sole CFTC regulatory authority.

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