The fight over sports event contracts is back in front of the Commodity Futures Trading Commission (CFTC), this time through the public comment docket for the agency’s proposed rewrite of Regulation 40.11, the rule governing prediction market contracts deemed contrary to the public interest.
With comments due July 27, DeFi Rate reviewed 87 unique written comments filed in the docket as of Friday afternoon. The response is far smaller than the CFTC’s earlier prediction market advance rulemaking, which drew thousands of comments. But this docket is more focused on a central question now facing the agency: whether sports event contracts should be treated as federally regulated products or as state- and tribal-regulated gambling.
Roughly one-third of the reviewed written comments appear to be template-style retail submissions aligned with Kalshi’s public advocacy tool, urging the CFTC to preserve contract-by-contract review, recognize offshore-market risks and allow mainstream sports contracts based on final scores, point spreads, season outcomes and player or team statistics.
But some of the most substantive filings push in the opposite direction. Tribes, state lawmakers, gaming regulators and consumer advocates warned that the proposal could create a federally sanctioned sports-betting bypass, while sports-data and integrity commenters pressed the CFTC to require reliable settlement data, market monitoring and stronger information-sharing if sports contracts are allowed.
The CFTC’s 40.11 rewrite
The proposal would amend Regulation 40.11, which implements the Commodity Exchange Act’s special rule for event contracts involving gaming, war, terrorism, assassination, unlawful activity and similar matters.
Under the proposal, the CFTC would define “gaming,” adopt a settlement-focused test for when a contract “involves” one of the listed activities and apply a multi-factor public interest analysis before determining whether a contract may be listed or cleared.
For sports, the proposal would not impose a categorical ban. It would leave room for broad, objectively settled markets such as game outcomes, point spreads, tournament advancement and season results, while treating injury markets, officiating outcomes, discrete in-game actions, fights or altercations and pre-collegiate sports as higher-risk categories.
That distinction is what drew much of the docket’s response. Supporters urged the CFTC to preserve a pathway for mainstream sports contracts, while critics argued the proposal would effectively authorize sports wagering through federally regulated exchanges.
Kalshi users press CFTC to preserve sports access
Individual traders accounted for the largest share of comments in the docket, with many comments following a similar structure in support of preserving access to sports event contracts.
Kalshi posted a public advocacy page titled “Tell the CFTC to Get the Prediction Market Rule Right.” The page asks users about their background, how they use prediction markets, which parts of the proposed rule they support and which sports markets they follow, then says it will draft a personalized comment and submit it to Regulations.gov.
The comments generally support contract-by-contract review and argue that regulated exchanges are preferable to offshore prediction market platforms. They also embrace the CFTC’s proposed distinction between mainstream sports contracts based on final scores, spreads, tournament outcomes or season-long statistics and higher-risk markets tied to injuries, youth sports, fights, deaths, war, terrorism or discrete in-game events.
Tribes warn of conflict with IGRA and compacts
Tribal opposition came from several governments and tribal gaming regulators, including the Santa Ynez Band of Chumash Indians in California, the Tonto Apache Tribe in Arizona, the Stockbridge-Munsee Community in Wisconsin and the Guidiville Rancheria in California. Their filings converged on the same basic argument: sports event contracts are gaming products, and the CFTC should not use derivatives law to override tribal sovereignty, tribal-state compacts or the Indian Gaming Regulatory Act (IGRA).
The Thlopthlocco Tribal Town of Oklahoma tried to separate ordinary financial event contracts from sports and casino-style products. The CEA should not be read to displace “IGRA, Tribal-State compacts, state gaming programs, or decades of consumer-protection and sports-integrity regulation,” the tribe wrote, urging the CFTC to prevent “sports wagering and casino-style gaming from being relabeled as federally listed event contracts.”
Other tribal filings attacked the proposal’s definition of gaming more directly. The Seneca-Cayuga Nation Office of the Gaming Commissioner in Oklahoma said the CFTC’s definition does not include the core gambling elements of “chance, reward, and consideration,” while the Spirit Lake Gaming Commission in North Dakota said sports contracts still have a value dependent on sporting outcomes and constitute sports betting regardless of how they are described.
The tribal comments also objected to the process, arguing that the CFTC had not conducted meaningful government-to-government consultation before proposing a rule that could affect tribal gaming rights. Minnesota’s Leech Lake Band of Ojibwe said the CFTC should withdraw the proposal and “refrain from advancing any proposed rule that would impact the regulated gaming industry,” or at minimum reaffirm that sports betting and other gambling on federal exchanges are contrary to the public interest.
State lawmakers and regulators warn against federal preemption
The National Conference of State Legislatures, the bipartisan organization representing state legislatures, urged the CFTC to define sports prediction markets as gaming and preserve state authority over sports betting under Murphy v. NCAA. NCSL said prediction markets should be treated as gaming because they allow users to speculate on events where financial gains or losses are determined by chance-based outcomes, and it urged the CFTC to interpret “gaming” broadly enough to include event contracts that function as sports wagers.
NCSL also asked the CFTC to state in the regulatory text, not just the preamble, that Rule 40.11 does not displace or preempt broader state gambling or gaming laws. The group said 39 states have legalized sports betting through their own legislative processes, while others have chosen to prohibit it, and argued that prediction market platforms should not be able to replicate state-regulated wagering products while bypassing state licensing, consumer-protection and revenue systems.
The Pennsylvania Gaming Control Board raised a similar objection, arguing that sports event contracts could compete with legal sportsbooks without the taxes, licensing rules, self-exclusion systems, responsible-gaming programs and integrity surveillance that apply to regulated sports wagering. The board said Pennsylvania’s gaming industry generated nearly $6.8 billion in 2025 revenue and nearly $3 billion in direct tax revenue, including $602.5 million from sports wagering, which is taxed at 36% of gross revenue in the state.
Tax-policy researchers at the Urban Institute raised a similar fiscal concern, arguing that the CFTC’s public-interest analysis should account for whether sports event contracts substitute for state-regulated sports wagering and erode tax revenues that support public services. The comment pointed to Illinois, Kentucky and North Carolina as early examples of states trying to address prediction market competition through licensing restrictions, transaction-fee taxes or sports-wagering treatment.
Commenters point to prediction market uses beyond sports
Beyond the sports fight, several companies and market-infrastructure commenters urged the CFTC to preserve room for event contracts tied to commercial data, public information and objectively settled real-world outcomes.
FanLabel Music Markets, a company developing music-related event market infrastructure, asked the CFTC to distinguish music metrics from contests or games. “Charts and stream counts measure what audiences did,” the company wrote. “There is no game, and there are no players.” FanLabel said chart rankings and stream counts are “a statistic about consumption” with “direct significance for royalty flows, catalog valuation, and release planning throughout the recorded-music economy.”
Predictboard, an independent prediction market data and intelligence platform that tracks regulated market prices and contract status across venues, supported the proposal but asked the CFTC to make its review process easier for traders, researchers and data users to follow. The company urged the agency to maintain “a single, public, machine-readable record of contracts under review, determinations made, and the findings supporting them,” saying that “a price on a contract under indefinite regulatory review is a degraded signal.”
Other filings raised similar line-drawing questions. SkyStop, a startup developing markets tied to flight delays and cancellations, asked for clarity around aviation-disruption contracts. MotorMarkets, an automotive market-intelligence company focused on collector-car auction and valuation data, sought similar treatment for vehicle-market metrics. Darrow AI, a legal AI and litigation-risk modeling company, argued that litigation-outcome contracts should be judged by the official legal decision that settles the market, not by the conduct alleged in the underlying case.
Critics see gambling dressed as finance
Consumer-protection groups and financial-policy commenters argued that the sports contract question is not only about federalism or tribal sovereignty. They urged the CFTC to treat retail confusion, gambling harms and financial-market framing as central to its public interest analysis.
The Financial Services Innovation Coalition, a financial-innovation advocacy group focused on consumer and market-structure policy, took the most direct position, urging the CFTC to find that sports event contracts are contrary to the public interest and may not be listed or cleared on registered exchanges. The group said sports event contract platforms use “the visual language and technical vocabulary of financial trading,” including order books, bid-ask spreads, portfolio views, market pricing and contract yields, while also marketing the products as sports gambling.
The 60 Plus Association, a senior-citizen advocacy group, raised a similar concern for older Americans. The group warned that retirees and people on fixed incomes could be especially vulnerable if sports contracts are presented through brokerage-style interfaces or framed as investment products rather than gambling.
Oregon Consumer Justice, a consumer-rights nonprofit, urged the CFTC to evaluate prediction markets through a consumer-welfare lens. The group said retail prediction markets have become “a high-stakes, gamified experience” that can obscure users’ likelihood of loss and the consequences of that loss, while citing research that most users lose money on the platforms.
Timothy Massad, who chaired the CFTC under Barack Obama, gave the consumer-protection critique an institutional edge. Massad wrote that “the Commodity Futures Trading Commission has lost its way,” arguing that the proposal would justify “a dramatic expansion of its jurisdiction” and make the agency “the nation’s regulator of sports betting and of betting and gambling more generally.” He said the CFTC was never assigned that responsibility by Congress and is “not suited” for it.
Sportradar pushes for data and surveillance standards
Sportradar, a global sports-data and integrity-monitoring company that announced a multi-year data and infrastructure partnership with Kalshi in June, said sports event contracts should depend on reliable settlement data and formal information-sharing systems. The company recommended that exchanges listing sports contracts have arrangements that give the CFTC, exchanges, sports governing bodies and recognized integrity monitors enough data “to detect, escalate, and investigate suspicious activity.”
Sportradar also urged the CFTC to require regular public reports showing aggregate activity in sports event contracts, including position and volume data, participant categories and concentration levels. The point, the company argued, is not to expose individual traders, but to help regulators see whether sports markets are dominated by a small number of participants or showing signs of manipulation, insider trading or other integrity risks.
The docket also included a meeting disclosure showing CFTC staff met with representatives of the NFL on July 22 to discuss the rulemaking, sports event contracts and the public interest. The disclosure does not state the league’s position or provide details from the meeting, but it shows that at least one major sports league has engaged directly with the CFTC as the agency weighs how to treat sports event contracts.
CFTC faces sports question after comment deadline
The comment period is scheduled to close July 27, giving the CFTC three more days to receive feedback before it decides whether to finalize the proposal, revise it or take more time as related litigation continues in federal and state courts. Some of the most consequential industry comments could still arrive near the deadline, as they did during the CFTC’s earlier, broader prediction market comment process.
Once the comment period closes, the agency will have to consider the record as it decides how to write the final version of Regulation 40.11. The comments filed so far give the CFTC competing arguments to weigh, including whether mainstream sports contracts can fit within a regulated derivatives framework with objective settlement rules, surveillance and information-sharing requirements, or whether they belong under the state and tribal gaming systems that already govern sports betting.
