CFTC Withdraws Event Contracts Rule Proposal and Staff Sports Event Contracts Advisory
Executive Summary
The CFTC has withdrawn its 2024 proposed rulemaking on "Event Contracts" (which sought to prohibit political event contracts) and the 2025 Staff Advisory (No. 25-36) on sports event contracts, signaling a policy shift under new Chairman Michael S. Selig toward promoting innovation via new rulemaking. This matters because it removes prior restrictive guidance, reduces immediate compliance burdens on prediction market operators, and opens the door for lawful event contracts while hinting at CFTC asserting exclusive jurisdiction over these derivatives. #
What Changed
- - Withdrawal of the June 10, 2024, Notice of Proposed Rulemaking titled “Event Contracts,” which proposed prohibiting political event contracts as contrary to public interest (e.g., akin to war or terrorism outcomes); CFTC confirms no final rules wil
- Withdrawal of CFTC Staff Letter 25-36 (issued Sept. 30, 2025), a Staff Advisory cautioning designated contract markets (DCMs) against offering sports event contracts due to litigation risks and state gaming regulator actions.
- Commitment to new event contracts rulemaking based on a "rational and coherent interpretation of the Commodity Exchange Act" to promote innovation, with clear standards for prediction markets; CFTC will reassess participation in federal litigation on
Suggested Considerations
- Review and disregard prior compliance programs built around the 2024 proposal or 2025 advisory (e.g., cease preparations for prohibiting political/sports contracts).
- Monitor CFTC docket for new event contracts rulemaking notice and provide comments during any future consultation period.
- Assess current offerings for event contracts under existing Commodity Exchange Act prohibitions (e.g., gaming, manipulation); document reliance on CFTC's innovation stance pending new rules.
- Evaluate litigation exposure, especially state gaming regulator actions; prepare for potential CFTC intervention asserting exclusive jurisdiction.
- No immediate prohibitions lifted or mandates imposed—continue operating within current CEA framework (e.g., anti-fraud, market integrity).
Key Dates
Compliance Impact
Urgency: Medium – This withdrawal immediately eliminates overhang from restrictive proposals/advisories, allowing firms to pivot from prohibition compliance to innovation planning without urgent deadlines. It matters for reducing uncertainty in prediction markets but requires vigilance for new rules, jurisdictional fights, and insider trading clarity, as platforms like Polymarket face ongoing scru
Who is Affected
References
AI-generated analysis. May contain errors or omissions — verify with the original CFTC source before acting. Full disclaimer.
Summary
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