The Commodities Futures Trading Commission (“CFTC”) is putting sports betting markets under the microscope. In just over a month, the agency will host a public roundtable to debate the rise of sports-related event contracts on prediction markets—an emerging trend that could shake up gaming operators, state governments, and the delicate balance of federalism that has governed sports betting since the Supreme Court struck down PASPA in 2018. With regulators now paying close attention, this is your chance to weigh in and help shape the future of sports betting and prediction markets. Stay tuned—big changes could be on the horizon.
In the announcement, CFTC Chairman Caroline Pham showed support for the pro-innovation stance seen in many Trump-era agencies, stating that “the current Commission interpretations regarding event contracts are a sinkhole of legal uncertainty and an inappropriate constraint on the new Administration.” This approach differs significantly from the agency’s previous legal arguments against Kalshi, seeking to prevent the platform’s listing of congressional control and gaming contracts. Kalshi won at the district court level, and the case was argued on appeal before the D.C. Circuit Court of Appeals on January 17. The D.C. Circuit’s opinion is yet to come.
According to the CFTC, the agency sees several key hurdles in crafting a balanced regulatory approach to prediction markets. One major challenge lies in existing CFTC orders governing designated contract markets (“DCMs”) under Regulation 40.11 (which prohibits event contracts that involve gaming, betting, or activities contrary to the public interest), alongside the agency’s past rule makings on event contracts. The legal landscape is also complex, shaped by federal court rulings—some of which reinforce the idea that “gaming involves games,” potentially restricting event contracts tied to sports.
Beyond agency-specific rules, broader legal and constitutional questions loom large. The intersection of state and federal regulatory authority, the Commerce Clause, federal preemption doctrines, and tribal sovereignty all play a role in determining how prediction markets might operate within the U.S. legal framework. As the debate unfolds, the CFTC must navigate these overlapping legal, regulatory, and policy considerations to chart the future of event contracts and sports betting markets.
Want a say in the future of sports betting markets? Now’s your chance. If you have feedback, suggestions, or want to be a panelist, email PublicRoundtables@cftc.gov with “Prediction Markets Roundtable” in the subject line by February 21. With the potential for federal oversight of sports betting across all 50 states, this is your moment to speak up before the rules are written.
