Master_07_

#PredictionMarketsCFTCBacking As of February 2026, the regulatory landscape for prediction markets has undergone drastic changes. Under the new leadership of Michael Selig, the Commodity Futures Trading Commission (CFTC) has effectively shifted from trying to ban prediction markets to **supporting them against bans at the state level.** CFTC now asserts "exclusive federal jurisdiction" over these markets, arguing that they are federally regulated financial derivatives, not "gambling" subject to state law. ### **Core Changes: From Ban to Support** Previously (2023–2024), CFTC sought to block election betting, arguing that it was contrary to the public interest. However, after significant court losses and a change in leadership, the agency has reversed its course. * **Federal Preemption:** CFTC is now involved in court cases (filing "amicus briefs") to support platforms like **Kalshi** and **Crypto.com**. They argue that individual states (such as Nevada or New Jersey) cannot ban these platforms because federal law (Commodity Exchange Act) supersedes state gambling laws. * **Rule Withdrawal:** In early February 2026, CFTC officially withdrew the proposed rule from 2024 that would explicitly ban political and sports event contracts. ### **Status of Key Platforms** | Platform | Current Status (Feb 2026) | | --- | --- | | **Kalshi** | **Fully Operational & Regulated by CFTC.** <br> <br>After winning the historic court case *KalshiEX LLC v. CFTC* (which legalized election betting), Kalshi is now the primary beneficiary of CFTC's new "federal preemption defense" against state regulators. | | $BTC