CFTC proposes rule to restrict war and conflict event contracts
The Commodity Futures Trading Commission unveiled a proposal that would restrict prediction market contracts tied to war and conflict events while clarifying which sporting-event contracts are acceptable on CFTC-registered platforms. CFTC Chairman Michael Selig outlined the rules, which aim to draw clearer regulatory boundaries around permissible event contracts. The action follows an earlier advanced notice of proposed rulemaking from the agency. Separately, the CFTC has asserted that event contracts fall under its jurisdiction as commodity derivatives and has signaled intent to police crypto-linked prediction markets, with a Polymarket bitcoin prediction contract already facing scrutiny after a mid-contract rule change. The commission is also actively engaged in federal preemption lawsuits against Minnesota and New Mexico over state-level prediction market restrictions.
Kalshi and Polymarket must purge or reclassify any active war and conflict markets immediately; those contracts are now explicitly in the prohibited column, and maintaining them through the comment period invites direct enforcement once final rules take effect. The simultaneous state litigation in Minnesota and New Mexico leaves both platforms exposed on dual compliance tracks.
Joins a running trio of federal actions this week — the 267-page rule framework, the Minnesota preemption suit, and now the war-contract prohibition — that collectively force Kalshi and Polymarket to rebuild their compliance playbooks across multiple regulatory and state fronts at once.