CFTC to rescind warning, may assert jurisdiction in Kalshi and Polymarket fights

CFTC chair Michael Selig said Thursday the agency will rescind warnings to prediction‑market operators and signaled it may fight state regulators that are trying to stop them. He told reporters the commission would yank a 2025 memo by senior staffers that advised platforms to have backup plans if courts scuttled sports contracts.

Selig said the memo "contributed to uncertainty in our markets." He also announced the agency was scrapping a prior rulemaking effort that would have limited prediction markets and is starting over — a process he said could take years. "For too long, the CFTC's existing framework has proven difficult to apply and has failed our market participants," he said, and he pledged to establish clear standards for "event contracts." He hinted the CFTC could intervene in lawsuits where Kalshi and other platforms, including one operated by Crypto.com, are fighting state regulators.

Some state gambling commissions and attorneys general have accused prediction markets of overstepping by offering contracts on events such as football games and the winner of the PGA Tour's Farmers Insurance Open. Major legal challenges to sports-related event contracts are underway in courts in New Jersey, Nevada, and Maryland, and regulators in Massachusetts have also raised concerns about younger users.

The New York attorney general and others have explicitly invoked the now-retracted CFTC advisory in their filings.

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