Published: May 7, 2026
(CFTC), the federal agency that’s attempting to reclassify bets on everything from the existence of aliens to the point spread on an NHL playoff game as financial derivatives.
This legal maneuver would allow the platforms that offer these wagers (companies like Kalshi and Polymarket) to circumvent state and tribal gambling rules—protections like age restrictions, advertising controls, betting limits and taxes. The CFTC has undertaken an aggressive campaign—siding with betting companies—and going so far as to sue states that are trying to preserve their jurisdiction over gambling.
It’s not often that financial services has a pop culture breakthrough. But prediction markets are certainly having a moment. From a South Park episode where Cartman and Kyle gamble during recess, to a John Oliver trademark rant about the casino in your pocket, to a viral folk song about the whole damn world being a slot machine, prediction markets have captured the public’s imagination, evoked intense emotions about the proper role of gambling in society and inspired outrage about the unfairness of perceived pervasive insider trading.
Which brings us to the Commodity Futures Trading Commission (CFTC), the federal agency that’s attempting to reclassify bets on everything from the existence of aliens to the point spread on an NHL playoff game as financial derivatives. This legal maneuver would allow the platforms that offer these wagers (companies like Kalshi and Polymarket) to circumvent state and tribal gambling rules—protections like age restrictions, advertising controls, betting limits and taxes. The CFTC has undertaken an aggressive campaign—siding with betting companies—and going so far as to sue states that are trying to preserve their jurisdiction over gambling. Part of the CFTC’s effort was putting out a request for comment on the issue, with responses that were due last week. This outline from the agency—and the comments it receives—will inform the CFTC as they write new guidelines about whether and how platforms can offer bets to U.S. customers.
The public took notice of the CFTC’s announcement. As of the formal deadline at the end of April, there were over 1,500 comments on the proposal—a stunning amount, considering the ordinarily sleepy agency typically has a small number of industry commentators providing feedback. (By way of contrast, before the prediction markets release, the largest number of comments the CFTC received on a proposal in 2026 was…nine).
The comment file has hundreds of letters submitted by people representing not financial services companies, lobbying shops or law firms, but themselves. Their letters overwhelmingly channel common sense and support what Better Markets has advocated for years (and most recently advocated on this proposal):
- Continue Reading: https://bettermarkets.substack.com/p/the-cftc-should-bet-on-the-american