KNIGHTER

#PredictionMarketsCFTCBacking As of February 2026, the regulatory landscape for prediction markets has undergone a drastic shift. Under the new chairmanship of Michael Selig, the Commodity Futures Trading Commission (CFTC) has effectively pivoted from trying to ban prediction markets to **backing them against state-level bans.** The CFTC is now asserting "exclusive federal jurisdiction" over these markets, arguing that they are federally regulated financial derivatives, not "gambling" subject to state laws. ### **The Core Shift: From Ban to Backing** Previously (2023–2024), the CFTC attempted to block election betting, arguing it was contrary to the public interest. However, following key court losses and a change in leadership, the agency has reversed course. * **Federal Preemption:** The CFTC is now intervening in court cases (filing "amicus briefs") to support platforms like **Kalshi** and **Crypto.com**. They are arguing that individual states (like Nevada or New Jersey) cannot ban these platforms because federal law (the Commodity Exchange Act) preempts state gambling laws. * **Rule Withdrawal:** In early February 2026, the CFTC formally withdrew a 2024 proposed rule that would have explicitly banned political and sports-related event contracts. ### **Status of Key Platforms** | Platform | Current Status (Feb 2026) | | --- | --- | | **Kalshi** | **Fully Operational & CFTC-Regulated.** <br> <br>After winning its landmark court case *KalshiEX LLC v. CFTC* (which legalized election betting), Kalshi is now the primary beneficiary of the CFTC's new "federal preemption" defense against state regulators. | | **Polymarket** | **Regulated US Return.** <br> <br>Previously banned in the US, Polymarket received an "Amended Order of Designation" from the CFTC in late 2025. This allows it to operate as a fully regulated, intermediated exchange in the US, ending its "offshore-only" status. | | **PredictIt** | **Operational.** <br> $ETH $BNB $BTC