US Regulator Reverses Course, Scraps Proposal to Ban Political Betting Contracts

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The US Commodity Futures Trading Commission has officially withdrawn a contentious 2024 proposal that sought to prohibit prediction market contracts tied to political elections, marking a significant reversal from a Biden-era regulatory posture.

The move, announced Wednesday, responds to sustained criticism that the rule overstepped the agency’s legal authority and stifled innovation in regulated event markets.

In a coordinated action, the CFTC also rescinded a 2025 staff advisory note that had cautioned trading platforms against listing sports-related event contracts. CFTC Chairman Michael S. Selig personally announced the twin decisions, using the opportunity to critique the previous administration’s regulatory philosophy.

The now-defunct proposal, initially unveiled in May 2024, aimed to ban exchange-traded contracts based on political outcomes and other sensitive activities, sparking intense debate over whether such markets constitute gambling or legitimate financial instruments.