CFTC's Proposed Prediction-Markets Rule Reaches White House OMB Review; Trump Posts Public Support
The US Commodity Futures Trading Commission submitted a formal proposed rule for prediction-market regulation to the White House Office of Management and Budget on 26 May 2026. President Trump posted explicit support on social media, framing CFTC exclusive jurisdiction as critical infrastructure for the industry.
The US Commodity Futures Trading Commission submitted a formal proposed rule for prediction-market regulation to the White House Office of Management and Budget on 26 May 2026. The OMB Office of Information and Regulatory Affairs (OIRA) review is the standard final step before a federal agency rule is published for public comment in the Federal Register. The text of the proposed rule has not been made public; the CFTC declined to comment until the review process is complete. Publication is typically 60 to 120 days after OIRA review begins, putting an expected Federal Register notice in late summer or early autumn 2026.
The substance matters because the rule will provide the legal infrastructure under which every CFTC argument in its six pending state preemption suits is being made. Currently the agency is leaning on the Commodity Exchange Act's grant of exclusive jurisdiction over derivatives listed on a Designated Contract Market, supplemented by individual product self-certifications by Kalshi and others. A formal rule would do three things: codify a clear category for event contracts as commodity derivatives; specify the operational and compliance standards platforms must meet; and establish enforcement protocols the CFTC can use without relying on the courts to apply pre-existing statutes.
President Trump posted explicit support for CFTC jurisdiction on his social-media account in the same week. The post is a meaningful reversal from his 24 April comment describing the broader prediction-market industry as "something of a casino." Industry observers read the pivot as reflecting the consolidation of administration support around Chairman Michael Selig's framework. Donald Trump Jr. remains a strategic advisor to Kalshi and an investor in Polymarket through 1789 Capital; the administration's position should be read against that backdrop.
What the rule does not do is end the state fights. Even with formal CFTC regulations on the books, state attorneys general can continue to argue that gambling-law authority is a traditional state police power that survives federal regulation of commodity derivatives. The realistic timeline is: OIRA review through summer, Federal Register publication around October, public comment period through year-end, final rule in early 2027. By that point the Arizona preliminary injunction will have produced an Eighth Circuit appellate ruling, and at least one of the other five state cases will likely have produced its own preliminary injunction order. UK readers should note that the US Commodity Exchange Act has no direct UK analogue; the closest framework is the FCA's treatment of contracts for difference, which differs materially on both retail leverage and market-maker obligations.
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Utah Files Felony Charges Against Kalshi and Its Founders — Second State to Criminally Charge a Platform
Utah filed criminal charges against Kalshi and its two co-founders, Tarek Mansour and Luana Lopes Lara, on October 28 — 13 felonies and a misdemeanour, including a second-degree 'pattern of unlawful criminal activity' count and 12 counts of online gambling promotion. The charges stem from a September sting in which an undercover agent placed 12 sports wagers verified to be in Utah. The CFTC sued Utah the day before to block state enforcement, its tenth such suit. Utah is the second state after Arizona to criminally charge Kalshi, and the first to charge the founders personally. Kalshi called it a 'crazy overreach.'
NBA Names Kalshi and Polymarket Preferred Exchanges — Leaving the NFL Alone in Opposition
The NBA announced on October 26 that it has named Kalshi and Polymarket its 'preferred prediction market exchanges,' signed a non-binding memorandum of understanding with the CFTC on basketball integrity, and expanded its DraftKings deal to include prediction markets — the first league to extend a sportsbook partnership into the category. The exchange deals bar league and team personnel from trading NBA contracts, limit permissible markets, and require sharing suspicious-trading data, in exchange for NBA intellectual property and official data. The NBA joins MLB, the NHL, and MLS as partnered leagues, leaving the NFL as the lone major holdout — and the only league fighting the platforms in court.
CFTC Chair Says Agency Is Watching Prediction Markets for Manipulation Ahead of Midterms
CFTC Chairman Michael Selig said on October 23 that the agency is closely monitoring prediction markets for manipulation ahead of the November 3 midterms, and that it is separately scrutinising oil market trading tied to President Trump's announcements about the war in Iran. Combined midterm open interest on Kalshi and Polymarket stood at $250 million as of October 18, with Kalshi holding 84%. Selig acknowledged the agency often catches political figures trading 'oftentimes after the fact.' The remarks highlight the CFTC's dual role as both the platforms' federal protector and their manipulation watchdog.