CFTC Withdraws Biden‑Era Ban on Sports & Political Prediction Markets

The U.S. Commodity Futures Trading Commission (CFTC) has formally withdrawn a 2024 Biden‑era proposed rule that would have banned event contracts covering sports, politics and similar prediction markets. Newly confirmed CFTC Chair Mike Selig called the earlier proposal a “frolic into merit regulation,” cancelled a September staff advisory that had warned market participants to prepare for state litigation, and said the agency will not issue final rules on that basis. Instead the CFTC will pursue a new rulemaking grounded in a “rational and coherent interpretation” of the Commodity Exchange Act to promote responsible innovation in derivatives and event markets. The move reduces the immediate risk of a federal ban on prediction markets and relieves platforms such as Polymarket, Kalshi and firms offering similar services (including those associated with Coinbase and Crypto.com) of the threat of an abrupt federal crackdown. However, state‑level lawsuits and legal uncertainty remain; platforms previously sued for unlicensed gambling could still face actions under state law. For crypto traders, the withdrawal lowers short‑term regulatory tail‑risk for prediction‑market tokens and related derivatives, may preserve liquidity and product development, and increases the chance of clearer federal guidance on listing, custody and compliance. Key SEO keywords: CFTC, prediction markets, regulation, derivatives, event contracts.