CFTC Withdraws Proposal to Ban Sports and Political Prediction Markets
The U.S. Commodity Futures Trading Commission has pulled a Biden administration-era rulemaking that would have curtailed sports and political prediction markets, a move industry outlets say shifts the regulatory outlook for event-based digital contracts.
The Commodity Futures Trading Commission confirmed it has withdrawn a Biden administration-era proposal that would have banned sports and political prediction markets; CFTC Chair Mike Selig publicly acknowledged the agency pulled the rulemaking and characterized the original proposal as a “frolic into merit regulation.” [1][5]
Coverage framed the withdrawal as a significant regulatory shift for prediction markets and relief for platforms offering event-based contracts — with some reports naming marketplaces such as Kalshi and Polymarket as affected by the ousted proposal. [1][4]
Observers cautioned that federal action does not eliminate all legal risks: state regulators continue to press enforcement actions against crypto-linked prediction-style products, exemplified by a Nevada gaming complaint targeting unlicensed sports-betting contracts and related market impacts on firms like Coinbase. [2]
The CFTC withdrawal reduces the prospect of an outright federal ban on sports and political prediction markets, but ongoing state-level enforcement and market responses mean legal and commercial uncertainty for platforms and participants remains. [1][2][5]
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Citations
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- 1Prediction Markets Get Relief as CFTC Pulls Ban ProposalEcoinimist• Feb 5, 2026
- 4U.S CFTC Withdraws Ban on Political Prediction Markets like Kalshi and PolymarketCoinpedia Fintech News• Feb 5, 2026
- 5CFTC pulls Biden-era proposal to ban sports, political prediction marketsCointelegraph• Feb 5, 2026
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