White House greenlights CFTC's prediction markets draft — let the comment-season commence 🎲

The White House has finalized its review of the Commodity Futures Trading Commission's prediction markets proposal framework, according to the Office of Information and Regulatory Affairs website, with the review completed last Friday. The regulator's draft rule on event contracts could now be released for a second round of public comment in the coming days, opening a new phase in the multi-year effort to formalize federal oversight of the sector. The White House's first review, completed in March, gathered information used to formulate the framework and drew submissions from legal experts, prediction market operators and venture firms including a16z, which argued the CFTC should maintain sole authority over the segment. A16z warned that without a single federal regulator, the market would face fragmented liquidity and weaken its use case as a forecasting and risk management tool.

The latest review covers a draft policy framework built on that initial input, and once published, would trigger another public feedback window before being revised and returned to the White House for a second review. Only after that step would the agency's commissioners vote on whether the framework becomes formal law. The push for clarity comes as the CFTC wages an escalating jurisdictional fight with U.S. states, including Minnesota, which has moved to ban the platforms by treating them as gambling. Sports betting firms have also described the venues as "100% gambling sites" and urged tighter regulation, while President Donald Trump has publicly backed CFTC oversight of what he called a "major industry."

Lawyers tracking the docket expect further litigation regardless of the rule's contents. Daniel Wallach, a sports betting and gaming lawyer, said traditional industry players will likely file lawsuits against the agency if the framework is finalized, adding that Administrative Procedure Act challenges are also expected. "Coming soon too: APA lawsuits. Prediction markets litigation 2.0," Wallach said. The legal clashes with states, which could ultimately reach the Supreme Court, are likely to run in parallel with the rulemaking process.

Prediction markets have grown into a multi-billion-dollar industry, with trading volumes hitting a new monthly record of $25 billion in May. The next several months will determine whether the CFTC's framework survives public comment, White House review and, potentially, courtroom challenges before any final rules take effect.