CFTC drafts 267-page Dodd-Frank defense of sports event contract authority
The CFTC released a 267-page proposed framework arguing that the Dodd-Frank Act grants the agency authority over sports event contracts on prediction markets. CFTC Chair Michael Selig said the proposal establishes a public-interest test and that clear standards are coming for sports prediction markets. The document, circulated as a draft, sets up an expected legal confrontation with states that classify such contracts as gambling under state law. The proposals are anticipated to draw sharp legal challenges from states. The framework addresses how the agency will oversee prediction markets as the sector expands.
Kalshi and Polymarket must now evaluate every sports market against the proposed public-interest framework. A finalized rule that reclassifies any current contract as impermissible gambling would force immediate delisting and expose both platforms to enforcement.
The CFTC's 267-page Dodd-Frank defense arrives as the agency sues Rhode Island to block state gambling enforcement against prediction markets, continuing a multi-state preemption fight that now spans at least three jurisdictions.