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White House Completes Review of CFTC Prediction-Market Rule, Setting Stage for New Federal Guidance
The Office of Information and Regulatory Affairs (OIRA) announced that the White House has finished its review of the Commodity Futures Trading Commission’s draft rule on prediction markets. The review concluded last Friday, according to the OIRA website. The draft rule, which the CFTC released in March, seeks to establish a federal regulatory framework for event‑contract derivatives that are traded on platforms commonly known as prediction markets.
The CFTC’s initial advance notice of proposed rulemaking (ANPRM) was published on March 16, 2026. That document invited public comment and was intended to gather information that would shape the final framework. During that comment period, a number of stakeholders—including legal experts, market participants, and venture capital firm Andreessen Horowitz (a16z)—submitted letters to the CFTC. a16z argued that the CFTC should retain exclusive authority over the sector, warning that a fragmented regulatory landscape could undermine liquidity and the use of prediction markets as forecasting and risk‑management tools.
After incorporating feedback from the first comment period, the CFTC drafted the rule that OIRA now reviewed. The next step, according to the agency, is a second round of public comment. Once that comment window closes, the CFTC will revise the draft as needed and submit it again to OIRA for review. The final draft will then be sent to the CFTC commissioners for a vote before it can become a formal regulation.
The push for clear rules comes amid an ongoing legal battle between the CFTC and several states that view prediction markets as gambling. Minnesota, for example, enacted a law that bans the operation of prediction‑market platforms such as Kalshi and Polymarket. The CFTC has sued the state and its governor, arguing that the federal framework already provides adequate oversight. The dispute is expected to reach the Supreme Court.
Sports‑betting firms have also expressed concerns. Some have labeled prediction‑market platforms as “100% gambling sites” and have called for stricter regulation. In contrast, former President Donald Trump has publicly endorsed the CFTC’s exclusive authority over the industry, describing it as a “major industry.” Legal analyst Daniel Wallach has warned that traditional exchanges and sports‑betting operators may file lawsuits against the CFTC if the new rules are finalized.
The prediction‑market sector is a multi‑billion‑dollar industry. According to reports, the monthly trading volume reached a record $25 billion in May 2026. The industry’s growth has prompted calls for a consistent federal regulatory approach that balances innovation with consumer protection.
At this stage, the White House has not yet issued a final decision on the draft rule. The agency’s review is a required step under Executive Order 12866 for significant federal rules. The outcome of the review will determine whether the CFTC can proceed with formal rulemaking.
In the coming months, stakeholders will watch for the opening of the second public‑comment period, the CFTC’s response, and any legal challenges from state regulators or industry competitors. The final rule, if adopted, could shape the future of prediction markets, influencing how firms develop event‑contract products and how consumers engage with these platforms.
The industry’s trajectory remains uncertain. While the federal government appears to be moving toward a unified regulatory framework, state‑level bans and potential litigation could delay or alter the implementation of the new rules. The CFTC’s next steps, the outcome of the ongoing lawsuit against Minnesota, and the White House’s final assessment will be key determinants of the sector’s regulatory environment.
The White House’s review marks a significant milestone in the federal effort to regulate prediction markets. The next phases of public comment, regulatory revision, and commissioner approval will determine whether the industry can operate under a clear, nationwide framework.
The CFTC’s initial advance notice of proposed rulemaking (ANPRM) was published on March 16, 2026. That document invited public comment and was intended to gather information that would shape the final framework. During that comment period, a number of stakeholders—including legal experts, market participants, and venture capital firm Andreessen Horowitz (a16z)—submitted letters to the CFTC. a16z argued that the CFTC should retain exclusive authority over the sector, warning that a fragmented regulatory landscape could undermine liquidity and the use of prediction markets as forecasting and risk‑management tools.
After incorporating feedback from the first comment period, the CFTC drafted the rule that OIRA now reviewed. The next step, according to the agency, is a second round of public comment. Once that comment window closes, the CFTC will revise the draft as needed and submit it again to OIRA for review. The final draft will then be sent to the CFTC commissioners for a vote before it can become a formal regulation.
The push for clear rules comes amid an ongoing legal battle between the CFTC and several states that view prediction markets as gambling. Minnesota, for example, enacted a law that bans the operation of prediction‑market platforms such as Kalshi and Polymarket. The CFTC has sued the state and its governor, arguing that the federal framework already provides adequate oversight. The dispute is expected to reach the Supreme Court.
Sports‑betting firms have also expressed concerns. Some have labeled prediction‑market platforms as “100% gambling sites” and have called for stricter regulation. In contrast, former President Donald Trump has publicly endorsed the CFTC’s exclusive authority over the industry, describing it as a “major industry.” Legal analyst Daniel Wallach has warned that traditional exchanges and sports‑betting operators may file lawsuits against the CFTC if the new rules are finalized.
The prediction‑market sector is a multi‑billion‑dollar industry. According to reports, the monthly trading volume reached a record $25 billion in May 2026. The industry’s growth has prompted calls for a consistent federal regulatory approach that balances innovation with consumer protection.
At this stage, the White House has not yet issued a final decision on the draft rule. The agency’s review is a required step under Executive Order 12866 for significant federal rules. The outcome of the review will determine whether the CFTC can proceed with formal rulemaking.
In the coming months, stakeholders will watch for the opening of the second public‑comment period, the CFTC’s response, and any legal challenges from state regulators or industry competitors. The final rule, if adopted, could shape the future of prediction markets, influencing how firms develop event‑contract products and how consumers engage with these platforms.
The industry’s trajectory remains uncertain. While the federal government appears to be moving toward a unified regulatory framework, state‑level bans and potential litigation could delay or alter the implementation of the new rules. The CFTC’s next steps, the outcome of the ongoing lawsuit against Minnesota, and the White House’s final assessment will be key determinants of the sector’s regulatory environment.
The White House’s review marks a significant milestone in the federal effort to regulate prediction markets. The next phases of public comment, regulatory revision, and commissioner approval will determine whether the industry can operate under a clear, nationwide framework.
