The future of prediction markets in the United States just got a lot clearer, and a lot more complicated at the same time.
The White House's Office of Information and Regulatory Affairs has begun reviewing a proposed CFTC rule on prediction markets, a key step in the federal regulatory process, that could shape how platforms such as Kalshi and Polymarket operate across the U.S.
This isn't a minor procedural move. When OIRA starts reviewing a proposed rule, it means the regulation is actively moving toward publication. The prediction market industry has been operating in legal grey areas for years. That's now starting to change.
What Triggered This Review
A RegInfo.gov entry shows that the proposal was received by the Office of Information and Regulatory Affairs on May 26 under Executive Order 12866, triggering a review of what the CFTC describes as a proposed rule on "Prediction Markets." The filing does not include the text of the proposed rule.
The executive order in question governs how major federal regulations are vetted before publication, requiring agencies to submit significant rules for thorough economic and policy analysis before they become official. OIRA, a division within the Office of Management and Budget, oversees the process.
Trump Has Made His Position Clear
The White House review didn't happen in isolation. President Trump has publicly and personally weighed in on which side should win this regulatory battle.
The timing comes days after President Donald Trump publicly backed the CFTC's authority over prediction markets, calling it "critically important" that the agency retain "exclusive authority" over the sector in a Truth Social post.
That's not a subtle signal. When a sitting president publicly backs a specific regulator's jurisdiction days before a White House review begins, the direction of travel is obvious.
States Are Pushing Back Hard
Not everyone is comfortable with Washington taking full control. Several states have been fighting this battle in court, and they're not backing down.
Illinois, New Jersey and other states have argued that sports‑linked event contracts effectively function as online betting markets. Kalshi and the CFTC have countered that designated contract markets regulated under federal commodities law fall under the agency's exclusive authority.
This is a genuine jurisdictional conflict between federal commodities law and state gambling regulations, and the outcome will determine whether prediction markets operate under a single national framework or a patchwork of state‑by‑state rules.
What the CFTC Was Already Asking
The White House review builds on groundwork the CFTC itself laid earlier this year.
The proposal follows a March advance notice of proposed rulemaking in which the CFTC sought public comment on which prediction market contracts may be prohibited as "contrary to the public interest," including contracts tied to elections, gaming, and sports.
That consultation already signalled the CFTC was preparing to draw clearer boundaries around what kinds of event contracts are acceptable under federal law.
What This Means for Kalshi and Polymarket
The move marks one of the clearest signs yet that the CFTC is preparing a broader federal framework for event contracts, following months of legal and political battles over sports and election markets.
For platforms like Kalshi and Polymarket, a clear federal framework is far preferable to ongoing legal uncertainty. A single national regulator means one set of rules to follow rather than 50 different state‑level interpretations. The question now is what those rules will actually say, and how much of the prediction market business model they leave intact.
