The Commodity Futures Trading Commission (CFTC) issued a landmark no-action letter on Thursday, creating a streamlined process for swap data reporting and recordkeeping specific to event contract operators. The move effectively removes the need for individual approvals, allowing prediction market platforms to use simpler reporting formats akin to futures, rather than complex swap documentation.
The relief applies to 19 platforms, including Polymarket US, Kalshi, Gemini Titan, and Bitnomial, and covers all existing beneficiaries of previous no-action letters. New entities can request identical treatment and be added to the letter's appendix upon approval, centralizing the process for future applicants.
Event contracts, which are binary-outcome instruments popular on prediction markets, technically qualify as “swaps” under regulatory definitions. However, the CFTC acknowledged that these contracts function more like futures due to their highly standardized terms, exchange-trading protocols, fungibility, and offset characteristics. This distinction allows operators to bypass burdensome swap reporting requirements.
The coordinated response from the Divisions of Market Oversight and Clearing and Risk follows multiple requests from exchanges seeking clarity on compliance. It signals institutional acceptance of prediction markets beyond political forecasting into economic indicators, sports, and cultural events. CFTC Chair Michael Selig has also been vocal about asserting the agency’s exclusive authority over these platforms amid state-level gambling law challenges, arguing that inconsistent regulation could drive the market offshore and risk FTX-style “implosions.”
