The chairman of the Commodity Futures Trading Commission (CFTC) came forward to start creating a clear path for the prediction markets. With the explosion in popularity of the new style of betting rising at an unprecedented pace, US lawmakers are now trying to catch up.

on prepared wordsChairman Michael S. Selig said it’s time for “clear rules” around prediction markets:

“It is time for clear rules and a clear understanding that the CFTC supports legal reform in these markets.

“Consistent with my commitment to promoting responsible innovation in crypto asset markets, I will continue to support responsible development in event contract markets.”

He detailed how the CFTC withdrew its 2024 “proposed rule” that would have stopped political and sports contracts. It becomes a concern for some states in recent months that markets like Kalshi and Polymarket can side-stepping state gambling lawsas, by technicality, prediction markets are “contracts,” not gambling. However, the CFTC has now clarified that it can support the platforms in their legal cases in the state in order to defend the “exclusive jurisdiction.”

BREAKING: Michael Selig, new CFTC chair, withdraws the agency’s 2024 event contracts rule proposal that would ban political and sports-related event contracts + staff letter warning operators of possible state action.

— Dan Bernstein (@dan_bernstein_) January 29, 2026

He admitted that this “contributes to uncertainty in our markets.”

Selig then went on to say that he directed staff to continue developing a framework for prediction markets:

“For too long, the CFTC’s current framework has proven difficult to use and has failed our market participants. That’s something I intend to fix by establishing clear standards for activity contracts that provide certainty to market participants.”

NEW: The CFTC will move to withdraw a proposed rule in 2024 that seeks to prevent contracts in sports and political activity and create new rules that clarify activity contracts, according to CFTC Chairman Seelig. The CFTC will also defend it "exclusive jurisdiction" in future court cases.

– Daniel Wallach (@WALLACHLEGAL) January 29, 2026

The third point made goes beyond “matters currently pending” in federal district and circuit courts.

The CFTC is moving to get more hands on the prediction markets

Selig concluded the topic by saying:

“Finally, I have directed the CFTC staff to work with our counterparts at the SEC to develop a unified interpretation of the definitions of Title VII.

“This effort will create clearer lines between certain security products and options, CFTC-regulated swaps, and SEC-regulated security-based swaps.

“Clear, coordinated guidance will allow companies to scale products responsibly and reduce the number of innovations that fall into what Chairman Atkins aptly described as ‘the no-man’s land’ between our two agencies.”

After being banned from the US, Polymarket entered again last year. Kalshi’s sports contracts are a major money drawdespite the criticisms.

STATEMENT from The Coalition for Prediction Markets on @ChairmanSeligToday’s statements on the joint SEC – CFTC Harmonization activity:

"We applaud Chairman Selig’s statements that the CFTC has the ‘skill and responsibility to protect its exclusive jurisdiction’ in the event…

– Coalition for Prediction Markets (@PredictAction) January 29, 2026

In response to what Selig said, the Coalition for Prediction Markets posted on X (formerly Twitter) in support of the CFTC chairman:

“We applaud Chairman Selig’s statements that the CFTC has ‘the expertise and responsibility to protect its exclusive jurisdiction’ over event contracts, and we welcome the Commission’s involvement in matters where that jurisdiction is under attack.

“By withdrawing uncertain guidance on sports-event contracts and committing to comprehensive rulemaking, the Commission is taking an important step to promote market clarity, responsible innovation, and trust in American markets.

“We look forward to working with the CFTC to continue its important mission.”

The Coalition for Prediction Markets is an independent body that pushes for fairer rules within the market prediction industry. It is led by the ex-Ambassador of the Organization for Economic Co-operation and Development, Sean Patrick Maloney, who has been in the government since the administration of Bill Clinton.

Featured image: Michael Selig via LinkedIn, Kalshi & Polymarket

The post CFTC chairman announces overhaul of rules for prediction markets first appeared in ReadWrite.

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