CFTC Eases Reporting Rules for Prediction Markets With New No-Action Letter

CFTC has issued a new no-action letter that eases certain reporting and recordkeeping requirements for fully collateralized event contracts, offering relief to prediction market platforms and clearing organizations.

The decision means the agency will not recommend enforcement action against designated contract markets (DCMs), derivatives clearing organizations (DCOs), or participants that fail to meet some swap-related reporting obligations for covered event contracts.

Event contracts, commonly used in prediction markets, are technically classified as swaps because they are based on binary outcomes, such as election results or sports outcomes. However, the CFTC said these products share more similarities with futures contracts and options, allowing some reporting to be handled directly through the agency instead of swap data repositories.

Major Prediction Platforms Included

The no-action relief applies to 19 platforms, including Polymarket, Kalshi and Gemini Titan. The CFTC also said companies planning to launch similar contracts can request similar relief.

According to the agency, the decision follows multiple requests from trading and clearing platforms seeking clearer treatment for event contracts.

Federal and State Fight Over Prediction Markets Continues

The move comes as prediction markets remain at the center of a growing legal battle between federal regulators and state authorities.

The CFTC has argued that prediction markets fall under federal derivatives law, while several states claim they resemble gambling products. The agency recently supported Kalshi in an ongoing legal dispute with Ohio after the state attempted to stop sports-related event contracts.

The CFTC is also involved in legal disagreements with several other states while reviewing over 1,500 public responses to proposed new rules for prediction markets.