TLDR
- CFTC staff will not pursue certain swap reporting failures for fully collateralized event contracts now.
- The relief covers DCMs, DCOs, participants, and listed venues such as Kalshi and Polymarket US.
- Event contracts may still qualify as swaps, but regulators see futures-like traits in them also.
- The CFTC says more platforms can seek similar relief before listing comparable contracts as needed.
- The decision arrives amid federal and state clashes over sports event contract oversight in courts.
The CFTC staff issued a blanket no-action letter for fully collateralized event contracts on prediction markets. The move relieves certain swap data reporting and recordkeeping duties for approved venues and clearing groups. It places the news angle on reporting relief, rather than a full rule change.
CFTC grants reporting relief for event contracts
The letter came from the CFTC’s market and clearing divisions on Tuesday. It covers designated contract markets, clearing organizations, and their participants. Staff said they would “not recommend enforcement” for specific missed swap reporting duties. It did not approve every possible event contract.
The relief applies to covered transactions tied to fully collateralized event contracts. It also covers some records linked to swap rules for those transactions. As a result, certain platforms may report these event contracts directly to the CFTC. The scope is limited to transactions covered by the letter.
The staff letter said event contracts can still meet the definition of swaps. That definition covers contracts tied to binary outcomes, including yes-or-no events. Even so, staff said many products look closer to futures and futures options. This approach separates reporting duties from wider product review.
The CFTC said it acted after many requests from DCMs and DCOs. It expects more requests as new event contract markets seek clearer treatment. Firms with similar contracts may ask staff for their own no-action letter. The process keeps future requests within the agency’s normal review channel.
Prediction markets gain clarity, but limits remain
The letter listed 19 platforms that may use the stated relief. The named firms included Kalshi, Polymarket, Gemini Titan, and other platforms. The coverage depends on the terms set out in the staff letter. They include named venues and related market participants.
The relief does not erase all CFTC rules for prediction market venues. It addresses selected swap data reporting and recordkeeping duties only. Venues still need to follow their wider duties as regulated markets. This distinction matters for operators that offer many contract types.
Prediction markets have grown as users trade contracts tied to future events. Sports, elections, economic data, and other outcomes often draw user interest. These products have also drawn attention from state gambling regulators. The growth has created pressure for clearer federal rules.
The staff letter may reduce confusion for firms already under CFTC oversight. It also gives applicants a clearer path before listing similar products. However, each firm must still fit the limits stated by staff. The letter gives relief, but it does not end oversight.
Federal and state fight continues
The reporting relief came as federal and state officials fought over market control. Several states have treated sports event contracts as gambling products. The CFTC has said federally regulated event markets fall within its authority. The issue has grown as venues list contracts linked to sports.
The agency filed an amicus brief in the Sixth Circuit Court of Appeals on Tuesday. It said Ohio had moved into federally regulated markets after targeting Kalshi. Ohio ordered Kalshi to halt sports event contracts in the state last year. The brief backed CFTC oversight in that federal appeal.
Kalshi sued Ohio officials in October 2025 over that order. A federal court denied its motion in March, and Kalshi then appealed. The appeal keeps the state and federal dispute active in court. The case could shape how similar disputes move through courts.
The CFTC has also sued officials in Wisconsin, New York, Arizona, Connecticut, and Illinois. Those cases seek to protect CFTC control over regulated prediction markets. The agency also received over 1,500 comments on a March event-contract proposal. Chair Michael Selig has described the agency’s role as “exclusive jurisdiction”
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