The CFTC has proposed two new rules for prediction markets — banning war bets and legalizing sports wagers. We break down what the crypto community thinks about the initiative.
On June 10, 2026, the US Commodity Futures Trading Commission (CFTC) published a proposed rule for prediction markets, including platforms like Polymarket and Kalshi. The document is open for public comment for 45 days and aims to define the legality of such contracts under federal law.
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Under the proposal, most sports event bets would be deemed permissible because they contribute to price discovery and are less likely to conflict with the public interest. However, the CFTC plans to ban contracts vulnerable to manipulation—bets on individual player injuries, referee decisions, or specific in-game events, for example.
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What Would Be Banned or Restricted for Polymarket and Kalshi?
The regulator intends to ban bets on the outcomes of military conflicts, terrorist acts, assassinations, and the violent overthrow of political leaders. Platforms have previously tried to bypass such restrictions by rephrasing bets around a politician’s departure date. The CFTC also clarifies that election result contracts do not count as gambling.
CFTC Chairman Michael Selig said the regulator aims to protect market integrity without stifling responsible innovation. The proposal distinguishes prediction markets from pure chance gambling, which should keep most sports contracts in the legal clear.
Read more: What Is Polymarket? The Beginner’s Guide to the Prediction Market Everyone Is Talking About in 2026
How Are Prediction Markets Doing in the US?
The CFTC’s initiative comes as prediction platforms grow in popularity amid legal battles with several states, including Wisconsin, New York, and Illinois, which classify such bets as gambling and insist on state-level regulation. The matter may ultimately be decided by the US Supreme Court.
According to a TRM Labs report, the on-chain gambling sector remained resilient despite the crypto market correction. Trading volume hit $14B in the Q1 of 2026. Meanwhile, prediction markets overtook gambling for the first time, reaching $36.6B in the quarter. In 2025, the two segments were roughly comparable at $51B and $54B, respectively.
Analysts note that both large players and ordinary users are driving the growth. Platforms are increasingly integrating with traditional finance. Kalshi is partnering with Nasdaq, and Polymarket is working with Dow Jones.
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