The US Commodity Futures Trading Commission has withdrawn a proposal to ban sports and political prediction markets, citing that it is contrary to the public interest. The agency’s chair, Mike Selig, confirmed the withdrawal of the proposal, stating that they will not issue final rules on the matter. The move affects prediction markets like Polymarket and Kalshi, popular for betting on various events, including sports.

Additionally, the CFTC withdrew a staff letter that reminded regulated entities of their obligations when facilitating sports event contracts. The letter advised companies to be prepared for potential litigation related to sports event contracts. This move comes amidst legal challenges faced by platforms like Polymarket and Kalshi, which have been accused of offering unlicensed gambling by some states.

Selig expressed that the advisory on sports event contracts intended to highlight litigation considerations but inadvertently caused confusion. He looks forward to collaborating with staff on an event contracts rulemaking. The CFTC’s actions aim to promote responsible innovation in the derivatives markets in line with Congressional intent.

Read more at Cointelegraph: CFTC Pulls Proposal Banning Sports Prediction Markets