The White House is reviewing a CFTC proposal for prediction market regulation, influenced by Trump's support for federal oversight.
The White House's Office of Information and Regulatory Affairs is evaluating a proposed regulation from the Commodity Futures Trading Commission (CFTC) aimed at prediction markets, which could significantly affect platforms like Kalshi and Polymarket across the U.S.
This proposal, submitted on May 26, has initiated a review process as mandated by Executive Order 12866. Specific details about the proposed rule concerning "Prediction Markets" remain undisclosed.
This review signals the CFTC's intent to create a federal regulatory framework for event contracts, particularly after ongoing legal disputes about sports and election markets.
States such as Illinois and New Jersey argue that these event contracts function similarly to online betting markets. However, Kalshi and the CFTC maintain that these markets should be regulated under federal commodities law, asserting their exclusive jurisdiction.
The executive order requires significant federal regulations to undergo a thorough examination before publication, with the Office of Information and Regulatory Affairs overseeing this process.
Notably, this assessment follows President Donald Trump's recent endorsement of the CFTC's oversight of prediction markets, labeling it as "critically important" for the agency to retain exclusive authority in this domain in a post on Truth Social.
This proposal comes after a March notice where the CFTC sought feedback on banning certain prediction market contracts that may be deemed "contrary to the public interest," particularly those involving elections and sports.
