CFTC Grants No-Action Relief For Prediction Markets, Easing Event Contract Reporting Rules

The U.S. Commodity Futures Trading Commission (CFTC) issued a no-action letter easing event contract reporting rules for fully collateralized event contracts, with its market and clearing divisions saying they will not recommend enforcement for specified swap-related recordkeeping and reporting failures.

“The Commodity Futures Trading Commission (CFTC) issued new no‑action relief covering swap data reporting for fully collateralized event contracts”

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The relief applies to designated contract markets (DCMs) and derivatives clearing organizations (DCOs) and their participants, and it is designed so that companies can report certain event contracts directly to the CFTC in a format similar to reporting for futures and options.

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The letter says event contracts on prediction markets technically qualify as “swaps” because they are based on binary events, but it argues their characteristics are closer to futures and options on futures because they are listed for trade by DCMs.

The CFTC said the no-action letter comes in response to numerous requests from DCMs and DCOs that list and clear event contracts, and it anticipates more similar requests.

The letter listed 19 platforms, including Polymaket, Kalshi and Gemini Titan, and it added that companies seeking to list similar contracts may request a no-action letter from the CFTC.

The CFTC’s no-action letter lands as prediction markets remain at the center of a widening federal-state fight over whether sports and other event contracts should be regulated as derivatives by the CFTC or as gambling products by state authorities.

The agency filed an amicus brief in the Sixth Circuit Court of Appeals on Tuesday, arguing that Ohio’s actions intrude on federally regulated markets after it ordered Kalshi to halt sports event contracts in the state last year.

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Kalshi sued Ohio lawmakers in October 2025, requesting that the federal court stop the Ohio Casino Control Commission and state attorney general from taking action, but the motion was denied in court in March, leading Kalshi to appeal the decision.

In a separate thread of the same dispute, the CFTC said it sued five states to cement its authority over prediction markets, including lawmakers in Wisconsin, New York, Arizona, Connecticut and Illinois.

Earlier in February, CFTC Chair Michael Selig publicly reiterated claims that the CFTC had “exclusive jurisdiction” over prediction markets.

The CFTC’s staff position effectively exempts prediction-market platforms from some swap data reporting and recordkeeping requirements, because the Divisions of Market Oversight, Clearing and Risk said they will not recommend enforcement actions for failing to comply with these reporting requirements.

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The letter explains that while such instruments may fall under the definition of “swaps,” they are traded on DCMs rather than swap execution facilities, and their standardized, exchange-trading characteristics make their reporting closer to futures and options.

The no-action relief is intended to eliminate regulatory uncertainty around platforms offering event contracts, and it is also meant to streamline the review of requests from exchanges and clearinghouses that list and clear event contracts.

The letter currently lists 19 beneficiaries, including Polymarket US, Kalshi, Gemini Titan, and Bitnomial, and it says other entities wishing to list event contracts may request a similar no-action position.

Even with the swap-reporting relief, the CFTC’s action does not remove other DCM rules, and the exemptions are tied to the specific swap data reporting and recordkeeping obligations covered by the staff letter.