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★ Government Action

Trump's commodities regulator scraps its proposed ban on betting contracts

DeregulationPrediction Markets

Filed January 2026

★ The Brief

What happened

On January 29, 2026, the chair of the Commodity Futures Trading Commission — the federal agency that regulates derivatives and commodity markets — announced it would abandon a proposed rule that would have banned "event contracts," the financial bets on political and sporting outcomes that prediction markets sell. In place of the ban, Chair Michael Selig said the agency would write new rules permitting the contracts, calling the existing framework one that had "failed market participants." The reversal clears the path for prediction-market operators such as Kalshi and Polymarket.

Who enabled it

Who benefits

Deal or steal?

The two operators with the most to gain both have the president's son on the payroll. Kalshi named Donald Trump Jr. a strategic advisor the week before his father's inauguration, and the venture firm 1789 Capital, where Trump Jr. is a partner, invested in Polymarket and put him on its board. The withdrawn proposal would have prohibited election and sports betting — the heart of what both platforms sell. Trump's hand-picked regulator scrapped it.

On January 29, 2026, CFTC Chairman Michael Selig announced the agency would withdraw a prior rule proposal that would have banned event contracts — financial instruments allowing wagers on political and sports outcomes — and instead draft new regulations to establish clear standards for such products. Selig described the existing framework as having 'failed market participants.' The move removes regulatory obstacles for prediction market operators such as Kalshi and Polymarket. Critics have argued these contracts are equivalent to gambling and should be prohibited.

Actors

Who pushed it · 2

Who initiated, paid, or pushed the action.

  • Michael Selig
    Michael Selig

    As newly appointed CFTC Chairman, announced the withdrawal of the proposed event contract ban and the drafting of new, permissive regulations governing the prediction market industry.

  • Commodity Futures Trading Commission
    Commodity Futures Trading Commission

    The agency, acting under Chairman Selig's direction, will withdraw the prior rule proposal banning event contracts and draft new regulatory standards in their place.

Sector-wide beneficiaries

  • Prediction Markets

    Withdrawing the proposed event-contract ban and signaling favorable new rules legitimizes prediction markets as a product category, benefiting every venue offering political and sports event contracts.

Sources

Further reading