White House Reviews CFTC’s Proposed Prediction Market Rule

A proposed rule for prediction markets submitted Tuesday (May 26) by the Commodity Futures Trading Commission (CFTC) is undergoing a regulatory review by the Office of Management and Budget, according to a U.S. government website.

The rule has not yet been published, according to the site.

Bloomberg flagged this notice in a Wednesday (May 27) report, saying that the notice includes no details about the proposal and that the CFTC declined to comment on its contents until the process is complete. The proposal will be subject to public comment, according to the report.

The CFTC said in March that it was seeking public comment on whether it should amend or issue new regulations governing event contracts traded on prediction markets.

In an advanced notice of proposed rulemaking (ANPRM) published in March, the regulator said it was seeking information about topics such as the application of CFTC regulations to prediction markets, the types of event contracts that may be prohibited because they are contrary to the public interest, and cost-benefit considerations related to prediction markets. The CFTC said it would use information gathered from the ANPRM to inform potential future actions.

CFTC Chairman Michael S. Selig said at the time in a press release that the regulator aims to “promote responsible innovation in our derivatives markets.”

The comment period closed on April 30, by which time the ANPRM had received 3,534 comments, according to the CFTC’s public comments portal.

President Donald Trump said in a Tuesday post on Truth Social that the CFTC must retain exclusive authority over prediction markets and that the federal government protect the industry.

“Under my leadership, we are setting ‘rules of the road’ that are the Gold Standard for the States,” Trump said in the post.

The CFTC announced in April that it filed separate lawsuits against Arizona, Connecticut and Illinois because the states took actions that intrude on the regulator’s exclusive jurisdiction to regulate prediction markets.

Later in the same month, the CFTC sued New York in response to what the regulator said was the state’s effort to apply its gambling laws to CFTC-regulated contract markets.