White House quietly reviews CFTC plan to lock in prediction market rules

The White House Office of Management and Budget (OMB) is reviewing a new proposal from the Commodity Futures Trading Commission (@CFTC) that would set formal guidelines for event contracts, according to a US government notice. The specific terms of the proposal have not been made public. Once the White House review is complete, the rule will be opened for public comment.

Trump Backs @CFTC, Names State Opponents

The timing adds political weight to what is already a charged regulatory process. President Donald Trump posted on Truth Social that it is "critically important that the CFTC's exclusive authority over Prediction Markets is maintained," publicly endorsing CFTC Chair Michael Selig's push to defend federal jurisdiction over event contracts against state-level legal challenges. Trump named Chris Christie, Letitia James, Tim Walz, and JB Pritzker as opponents of that position.

New York Attorney General Letitia James filed lawsuits alleging that some prediction markets are violating state gambling laws. Illinois, headed by Governor J.B. Pritzker, sent a cease-and-desist order, and Minnesota Governor Tim Walz signed a law imposing criminal penalties for operating prediction markets. Trump's comments follow lawsuits filed by the administration against Minnesota, New York, Arizona, Wisconsin, Connecticut, and other states for policies that restrict residents' use of prediction markets.

A Federal Framework in the Making

On March 12, 2026, the CFTC took two significant steps toward a regulatory framework for prediction markets, issuing a staff advisory to designated contract markets (DCMs) detailing applicable rules, and publishing an Advance Notice of Proposed Rulemaking (ANPRM) requesting public comment on a broad range of issues relating to event contract regulation.

The CFTC's position is consistent with its claim of exclusive jurisdiction over event contracts. The agency has advanced that stance as amicus curiae in federal appellate litigation against state regulators in Nevada before the Ninth Circuit. In April 2026, a panel of the US Court of Appeals for the Third Circuit held that the CFTC had jurisdiction over sports event contracts offered on Kalshi's exchange. In a split decision, the panel found that the Commodity Exchange Act pre-empted New Jersey's gambling laws.

At the heart of the legal dispute is the question of whether prediction market contracts tied to sports and entertainment are legitimate financial instruments or gambling products in a new form. Until the Supreme Court draws the line between event contracts and betting or wagering, prediction markets will operate in a dual regulatory reality, federally legitimized under the CFTC but resisted at the state level in multiple states. The OMB review of the CFTC's latest proposal is the next formal step in what is shaping up to be a multi-year regulatory and legal contest between Washington and the states.

Sources:
The Hill: Trump says it is "critically important" CFTC has exclusive authority over prediction markets
Federal Register: CFTC Advance Notice of Proposed Rulemaking on Prediction Markets
Sidley Austin: U.S. CFTC Signals Imminent Rulemaking on Prediction Markets