CFTC exempts prediction markets from swap data reporting in no-action letter
CFTC staff issued a blanket no-action letter on May 13 exempting prediction market event contracts from swap data reporting requirements. Event contracts technically qualify as swaps under existing law, creating compliance uncertainty for platforms; the letter removes that ambiguity by relieving designated contract markets and swap execution facilities of those reporting duties. The relief is conditional and time-limited. The CFTC framed the move as part of its ongoing effort to refine oversight of prediction markets following recent court rulings that expanded legally tradable event contracts. The letter applies to fully collateralized contracts and was issued by the agency's market and clearing divisions via NS3.
Kalshi and Polymarket US can now reduce compliance overhead on event contract reporting, freeing resources for the federal-preemption legal fight the CFTC is already co-litigating with them against Ohio and other state regulators.
Brings the running tally of federal regulatory actions on prediction markets to four this week — CFTC no-action relief, amicus brief for Kalshi, suit against states, and the Senate trading ban — as Washington builds a unified federal front against state-level pushback from Ohio, Minnesota, Colorado, and Wisconsin.