The Commodity Futures Trading Commission submitted a formal proposed rule on prediction markets to the Office of Management and Budget on May 26, putting it in line for White House review before publication. The CFTC declined to comment on the rule’s contents until the process is complete.
That silence follows 3,534 public comments the agency received on its March advance notice of proposed rulemaking, which asked whether the CFTC should amend or issue new regulations for event contracts. Chairman Michael S. Selig described the regulator’s goal at the time as promoting “responsible innovation” in derivatives markets. He didn’t tip his hand on what direction the formal rule takes.
The rulemaking push doesn’t exist in a vacuum. The CFTC sued Arizona, Connecticut, and Illinois in April for intruding on its exclusive jurisdiction over prediction markets, and sued New York the same month after the state tried to apply gambling laws to CFTC-regulated contract markets. President Trump weighed in on Truth Social the same day the rule hit OMB, declaring the CFTC must retain exclusive authority and that federal rules will be “the Gold Standard for the States.”
If OMB clears this rule without changes, it will define exactly what states can and can’t do. That’s the real stakes: a rule that codifies CFTC’s exclusive jurisdiction doesn’t just settle the litigation against four states, it tells every other state legislature what room is left to maneuver. The public comment period that follows OMB review means the final answer won’t come fast.
No publication date has been set.
Marcus Webb