CFTC Proposes Framework for Reviewing Event Contracts Tied to Gaming, Sports, and Other Enumerated Activities

The Commodity Futures Trading Commission (CFTC) has issued a Notice of Proposed Rulemaking (NPRM) that would establish a formal framework for reviewing certain event contracts, including contracts linked to sporting events, under Section 5c(c)(5)(C) of the Commodity Exchange Act (CEA). The proposal, published on June 10, 2026, would amend CFTC Regulation 40.11 and add a new Appendix F to Part 40.¹

👉🏽https://www.cftc.gov/PressRoom/PressReleases/9249-26

The rulemaking comes amid continued growth in the prediction market and event contract space. According to the CFTC, registered entities have increasingly listed contracts tied to a broader range of real-world outcomes, including sporting events and other future occurrences.

Section 5c(c)(5)(C) of the CEA prohibits contracts that involve terrorism, assassination, war, gaming, or conduct that is unlawful under federal or state law if such contracts are determined to be contrary to the public interest.² The proposed rule seeks to provide greater clarity regarding how the Commission will evaluate whether a contract falls within one of these enumerated categories and whether it should be permitted to trade.

As CFTC Chairman Michael S. Selig explained:

“The CFTC will protect the integrity of our regulated markets without standing in the way of responsible innovation. This proposal gives the Commission a durable, transparent framework to identify the contracts Congress directed us to scrutinize while letting legitimate markets move forward.”

Among other things, the proposal would:

• Establish a structured process for determining whether an event contract involves an activity enumerated in Section 5c(c)(5)(C);

• Create a 90-day review process with specified procedural safeguards;

• Set forth public interest factors that the Commission would consider on a contract-by-contract basis; and

• Define key statutory terms, including “involve” and “gaming.”

The NPRM follows the Commission’s March 2026 Advanced Notice of Proposed Rulemaking (ANPRM) concerning prediction markets. The CFTC emphasized that the current proposal addresses only a narrow subset of issues raised in that broader proceeding and indicated that additional rulemaking may follow.

The proposal is likely to attract significant attention from prediction market operators, exchanges, market participants, and sports-related event contract platforms. While the CFTC has repeatedly stated that it supports responsible innovation, the proposal reflects the Commission’s continuing effort to delineate the boundaries between permissible event contracts and contracts that Congress directed the agency to scrutinize more closely.

¹ Prediction Markets; Public Interest Determinations, Notice of Proposed Rulemaking, 91 Fed. Reg. (June 10, 2026) (to be codified at 17 C.F.R. pt. 40).

² Commodity Exchange Act § 5c(c)(5)(C), 7 U.S.C. § 7a-2(c)(5)(C).