CFTC issues no-action relief for prediction market event contract reporting
Designated contracts markets, clearinghouses and their participants receive exemption from specific swap recordkeeping and data reporting requirements for fully collateralized event contracts through the no-action letter.
The market and clearing divisions of the US Commodity Futures Trading Commission (CFTC) have provided no-action relief targeting fully collateralized event contracts, relaxing specific swap data reporting and recordkeeping requirements for prediction market platforms and clearing entities.
In a Wednesday announcement, the divisions stated they would refrain from recommending enforcement actions against designated contract markets (DCMs), derivatives clearing organizations (DCOs), or market participants who fail to meet specified swap-related recordkeeping obligations or fail to submit covered transactions to swap data repositories.
Within prediction markets, event contracts technically fall under the "swaps" category since they derive value from binary events. The letter contended, however, that comparable contracts are traded on DCMs and share more commonalities with futures and options on futures, thereby allowing firms to submit certain events contracts directly to the CFTC for reporting purposes.
Nineteen platforms received mention in the letter, among them Polymaket, Kalshi and Gemini Titan. The letter further noted that firms wishing to offer similar contracts may submit their own no-action letter requests to the CFTC.
According to the CFTC, the no-action letter represents a response to multiple requests from DCMs and DCOs that facilitate trading and clearing of event contracts, with the agency expecting additional similar requests in the future.
This development has the potential to simplify compliance procedures for CFTC-regulated prediction market platforms, such as Kalshi and Polymarket US, while the agency maintains its jurisdictional defense against state gambling regulatory authorities.
This no-action letter emerges during a period when prediction markets have become the focal point of an expanding federal-state conflict regarding whether sports and other event contracts fall under CFTC derivatives regulation or state gambling authority oversight. On Tuesday, the agency submitted an amicus brief to the Sixth Circuit Court of Appeals, contending that Ohio's regulatory actions encroach upon federally regulated markets following the state's order for Kalshi to cease sports event contracts within its borders last year.
In October 2025, Kalshi initiated legal action against Ohio lawmakers, petitioning the federal court to prevent the Ohio Casino Control Commission and the state attorney general from enforcement actions, though the court rejected the motion in March, prompting Kalshi to file an appeal.
CFTC pushes for exclusive jurisdiction over prediction markets
The CFTC currently maintains several active disputes with state legislators concerning prediction market regulatory authority. The agency initiated lawsuits against five states in an effort to establish its exclusive jurisdiction over prediction markets, targeting legislators in Wisconsin, New York, Arizona, Connecticut and Illinois.
In May, the CFTC announced it had collected more than 1,500 public responses regarding a rule proposal from March that would grant the agency authority to modify or create new regulations governing event contracts on prediction markets.
The feedback demonstrated mixed perspectives, with certain state regulators advocating for more aggressive restrictions on prediction markets, while other entities, including venture capital firm a16z, supported the CFTC's position, contending that state enforcement actions against these platforms contradict federal law and restrict market access for retail users.
On March 12, the CFTC released a staff advisory that categorized event contracts on prediction markets as a "financial asset class," as Cointelegraph reported.
In February, CFTC Chair Michael Selig made public statements reaffirming his position that the CFTC maintains "exclusive jurisdiction" over prediction markets.