The U.S. Commodity Futures Trading Commission (CFTC) has officially withdrawn its 2024 proposal to ban political and sports prediction markets such as Kalshi and Polymarket.
The decision signals a major policy shift and opens new doors for platforms that offer event-based trading in the United States.
CFTC Withdraws Prediction Market Ban
In a recent press release, the Commodity Futures Trading Commission (CFTC) announced that it has dropped the 2024 draft rule that aimed to ban political prediction markets. The earlier proposal planned to treat these markets as harmful and restrict them completely.
However, under the new leadership of Chairman Mike Selig, the draft rule will no longer move forward.
The CFTC admitted that the old proposal created confusion for businesses and investors. It also accepted that the plan went beyond the proper role of the regulator.
With this decision, prediction market platforms can now continue to operate without fear of an outright ban.
New Leadership Brings Clearer Direction
The policy change follows a major shift in CFTC leadership after President Trump took charge of Whitehouse. The earlier rule was created under the Joe Biden administration and never received final approval.
Chairman Mike Selig called the old proposal a “policy overreach.” He said it tried to control markets in a way that went beyond the agency’s proper role. According to Selig, the rule created confusion and uncertainty for businesses in the prediction market industry.
With this reversal, platforms like Kalshi and Polymarket can continue operating freely. These platforms let users predict real-world events, such as politics and sports, often using blockchain technology.
Relief for Prediction Market Platforms
The decision is being seen as a major victory for the growing prediction market industry. Over the past few years, on-chain platforms have gained popularity, especially during major political events.
In recent years, these platforms have grown in popularity, especially around major political and economic events. Users rely on them to trade contracts based on real-world outcomes.
In 2024, the CFTC tried to block Kalshi from offering political event contracts but lost a court battle. That defeat allowed such markets to launch legally.
With the ban now removed, these businesses can continue to expand and attract more users in the U.S. market.
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