CFTC Eases Reporting Rules for Prediction Markets Amid Jurisdiction Battle
The U.S. Commodity Futures Trading Commission (CFTC) issued a no-action letter on May 14, 2026, offering regulatory relief to prediction market platforms such as Polymarket and Kalshi. The relief eases swap data reporting and recordkeeping requirements for fully collateralized event contracts, which often trade on these platforms. The move is seen as a significant step in simplifying compliance for CFTC-regulated entities, while also sharpening the agencys claim to exclusive jurisdiction over these markets. Event contracts, which are essentially binary bets on real-world outcomes, are technically classified as swaps under U.S. law. However, the CFTC argues they share more characteristics with futures and options. The no-action letter allows designated contract markets (DCMs) and derivatives clearing organizations (DCOs) to report certain event contracts directly to the CFTC, bypassing swap data repositories. This decision has immediate implications for 19 platforms named in the letter, including Polymarket, Kalshi, and Gemini Titan. Firms looking to list similar contracts can also apply for their own no-action relief. The no-action letter comes as prediction markets are caught in a growing clash between the CFTC and state gambling regulators. The agency is pushing to solidify its authority by treating these contracts as derivatives, while states like Ohio see them as