#PredictionMarketsCFTCBacking As of February 2026, the regulatory landscape for prediction markets has undergone a drastic shift.
Under the new chairmanship of Michael Selig, the Commodity Futures Trading Commission (CFTC) has effectively pivoted from trying to ban prediction markets to **backing them against state-level bans.**
The CFTC is now asserting "exclusive federal jurisdiction" over these markets, arguing that they are federally regulated financial derivatives, not "gambling" subject to state laws.
### **The Core Shift: From Ban to Backing**
Previously (2023–2024), the CFTC attempted to block election betting, arguing it was contrary to the public interest. However, following key court losses and a change in leadership, the agency has reversed course.
* **Federal Preemption:** The CFTC is now intervening in court cases (filing "amicus briefs") to support platforms like **Kalshi** and **Crypto.com**. They are arguing that individual states (like Nevada or New Jersey) cannot ban these platforms because federal law (the Commodity Exchange Act) preempts state gambling laws.
* **Rule Withdrawal:** In early February 2026, the CFTC formally withdrew a 2024 proposed rule that would have explicitly banned political and sports-related event contracts.
### **Status of Key Platforms**
| Platform | Current Status (Feb 2026) |
| --- | --- |
| **Kalshi** | **Fully Operational & CFTC-Regulated.**
After winning its landmark court case *KalshiEX LLC v. CFTC* (which legalized election betting), Kalshi is now the primary beneficiary of the CFTC's new "federal preemption" defense against state regulators. |
| **Polymarket** | **Regulated US Return.**
Previously banned in the US, Polymarket received an "Amended Order of Designation" from the CFTC in late 2025. This allows it to operate as a fully regulated, intermediated exchange in the US, ending its "offshore-only" status. |
| **PredictIt** | **Operational.**
