The public comment period on the Commodity Futures Trading Commission’s (CFTC) proposed prediction-market rules closes on 27 July, leaving five days for exchanges, sports leagues, state regulators and traders to influence a framework that will determine which event contracts US platforms can list.
The stakes are concentrated in sports. Roughly 87% of the $39.7 billion Kalshi traded in the year to February was sports contracts, according to the Congressional Research Service, against 38% of Polymarket’s $36.2 billion. The rules being written this month govern the category that carries the industry.
What Closes on 27 July
The CFTC issued its Notice of Proposed Rulemaking on 10 June and published it in the Federal Register two days later, starting a 45-day clock. The 267-page proposal, filed under RIN 3038-AF65, would amend Rule 40.11 of the Commodity Exchange Act and add a new Appendix F.
It establishes a three-step test for any event contract: whether it involves an excluded commodity, whether it touches an enumerated activity such as gaming, terrorism, assassination or war, and whether it is contrary to the public interest. The proposal also supplies something the 2024 version lacked, a working definition of “gaming” and a rule for when a contract “involves” an underlying activity.
Comments go to the CFTC’s public comment portal under RIN 3038-AF65 and must be received, not merely postmarked, by Monday.
What the CFTC Proposal Permits and What It Targets
Contracts settling on aggregate outcomes would largely survive. Final scores, point differentials, season-long statistics and tournament advancement are unlikely to be found contrary to the public interest where they rest on objective settlement data and established league integrity frameworks, according to an analysis by law firm Dechert.
The line falls at granularity. Contracts on player injuries, officiating decisions, discrete player or team actions, physical altercations and pre-collegiate sports are all flagged as likely prohibited on the reasoning that narrow outcomes are the ones a single participant can manipulate. The CFTC’s broader argument is that a market on one game aggregates information well beyond that game, in the way commodity futures do.
Regarding the mechanism, the proposal does not ban categories outright. It establishes which contracts are likely to be found contrary to the public interest, which is how prohibition operates under Rule 40.11.
Who Is Already Filing, and What They Want
The precedent for this window is instructive. The CFTC’s advance notice in March drew roughly 3,500 comments before closing on 30 April, but only about 300 offered detailed comments and recommendations, with the rest either duplicative or non-substantive, by the commission’s own count in the proposal. That ratio is the argument for filing something specific. A comment engaging the definition of “gaming,” the settlement-data standard or the treatment of discrete in-game events has a documented path into the final text. A form letter does not.
The positions are already drawn. The American Gaming Association, representing the commercial casino and sportsbook industry, moved on 14 July to intervene in the CFTC’s suit against Wisconsin, seeking to join the state as a defendant on the grounds that the case could reshape state gaming regulation and the standing of licensed sportsbooks. Wisconsin does not oppose the move. The CFTC does.
Tribal gaming groups have taken a parallel line, urging Congress and the Commission to act before the market expands further, and both the AGA and tribal organisations have joined or attempted to join several state lawsuits. Senate Democrats wrote to Chairman Michael Selig in February arguing that contracts involving gaming, war, terrorism and assassination are already barred by statute and that the Commission should not rewrite around them. The exchanges want the permitted set drawn as widely as possible.
The State Preemption Fight Underneath the Rule
The rulemaking sits inside a jurisdictional battle. The CFTC filed an amicus brief in the Ninth Circuit in February arguing event contracts are swaps under its exclusive authority, and between April and June it sued Arizona, Connecticut, Illinois, New Mexico, New York, Minnesota, Rhode Island and Wisconsin to block state enforcement, per a client alert from WilmerHale. The commission also sued Kentucky, arguing state attempts to shut down federally regulated markets intrude on a federal scheme.
A finalized rule strengthens that position considerably. A federal framework defining permissible sports contracts is a harder thing for a state gambling regulator to argue around than a case-by-case posture.
What Happens After Monday
Nothing automatic. No statute compels the CFTC to finalize anything on a set timetable. The agency reviews the file, decides whether to adopt, revise or abandon, and issues a final rule when it chooses. The 2024 proposal on the same subject was never finalized at all. It was withdrawn in 2026.
That makes the comment file the last reliable point of leverage rather than one step in a scheduled process. A rule could arrive in months, or the proposal could be reworked and reproposed, or it could sit.
The market will not wait either way. The number of event contracts trading on prediction markets rose from roughly 220 in 2021 to more than 8,000 in May, according to the CFTC’s own proposal. Prediction markets set records in the second quarter even as crypto spot volume fell 27.9%, and the World Cup drove monthly volume to fresh highs, with Polymarket’s tournament winner market alone drawing more than $3.3 billion. Whatever emerges from this docket will govern all of it.