The U.S. Commodity Futures Trading Commission has proposed a rule that would create a formal review process for event contracts linked to gaming, war, terrorism, assassination, or unlawful activity. The proposal is now under review at the White House Office of Information and Regulatory Affairs, while the agency continues to collect input on how these contracts should be handled in regulated markets.
Under the plan, the CFTC would amend Regulation 40.11 and add Appendix F to Part 40. The framework is meant to determine whether an event contract involves activities listed in Section 5c(c)(5)(C) of the Commodity Exchange Act. A 90-day review period would be added, along with public-interest criteria that the agency could use when assessing whether a contract should be permitted.
Proposal would define key statutory terms
The agency said the rule would also clarify several statutory terms, including “involve” and “gaming.” This proposal covers one part of the broader prediction market review the CFTC began earlier this year. CFTC Chairman Michael S. Selig said the aim is to create a more transparent process while allowing legitimate markets to keep operating.
The push comes as prediction market activity has expanded sharply. Previously published figures showed that Kalshi’s weekly trading volume rose from $300 million to $3 billion between September 2025 and March 2026. That growth has brought more attention to market structure, contract design, and the legal limits around event-based trading.
More than 1,500 submissions followed the March notice
On March 12, the CFTC issued an Advance Notice of Proposed Rulemaking and asked for feedback on market oversight, manipulation risk, insider trading concerns, public-interest questions, and blockchain integration. The comment period closed on April 30. After that, the agency said it had received more than 1,500 submissions from exchanges, blockchain firms, sportsbooks, and other market participants.
The CFTC also released Advisory Letter No. 26-08 alongside the proposal. That guidance reminded firms that existing rules on fraud, manipulation, and insider trading already apply to event contracts. The new proposal does not replace those standards; it sits on top of them.
Sports contracts and blockchain platforms remain under review
Sports-related contracts remain one of the main areas under examination. Regulators are still assessing how those products fit within current market rules. Blockchain-based platforms are also part of the discussion, as more event contracts use decentralized technology for trading and settlement.
That gives the proposal relevance beyond traditional prediction venues. Platforms that support trading on event outcomes, especially those using blockchain infrastructure, could face a more defined review process if the rule moves ahead. For now, the CFTC is focused on how oversight of these contracts should work across regulated markets.