As of February 2026, the Commodity Futures Trading Commission (CFTC) has shifted to an assertive pro-industry stance, formally backing prediction markets as legitimate commodity derivatives. Under the leadership of Chairman Michael S. Selig, the agency is actively defending its exclusive jurisdiction over these markets against state-level efforts to regulate them as gambling.
Recent Regulatory Actions (January–February 2026)
The CFTC has taken several concrete steps to remove regulatory barriers:
Withdrawal of Proposed Bans: On February 4, 2026, the CFTC officially withdrew a 2024 proposed rule that would have prohibited political and sports-related event contracts. Chairman Selig characterized the previous proposal as "policy overreach".
Retraction of Staff Advisories: The agency withdrew a 2025 staff advisory that cautioned exchanges about offering sports contracts due to potential litigation.
Initiation of New Rulemaking: The CFTC has directed staff to draft a new regulatory framework grounded in the Commodity Exchange Act to provide "clear and durable standards" for the industry.
Legal Defense and Court Interventions
The CFTC is currently in open legal conflict with state regulators to prevent what it calls a "power grab" by state gaming boards.
Amicus Briefs: On February 17, 2026, the CFTC filed a "friend of the court" brief in the Ninth Circuit Court of Appeals. The filing supports operators like Kalshi and Polymarket in their battle against Nevada and other states, arguing that event contracts are federally regulated derivatives, not illegal wagering.
Jurisdictional Battle: States such as Nevada and Massachusetts argue that sports-related contracts function as unlicensed gambling. While the Ninth Circuit recently denied a stay for Kalshi in Nevada, a Massachusetts appeals court granted a temporary stay on February 18, 2026, allowing operations to continue during an expedited appeal.
Users interested in specific legal filings can monitor the CFTC Press Room for official amicus brief updates and rulemaking announcements.
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