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CFTC Gives Prediction Market Exchanges 30 Days to Address US Geographic Restrictions

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Altay Celikkaya

Content Manager

Updated: 06/11/26

Reading Time: 3 minutes

The US Commodity Futures Trading Commission (CFTC) has given federally regulated exchanges 30 days to remove domestic geographic restrictions that violate its impartial access requirements or explain why compliance is not feasible.

Announced on 5 November 2026, the interpretation could affect prediction market platforms operating across states with different gambling laws. It also raises questions about how federal access requirements interact with existing state restrictions.

CFTC logo and US flag highlight new geographic access requirements for exchanges.

Regulation & Compliance

Key Takeaways From the CFTC's Geographic Access Interpretation

The CFTC has clarified how impartial access requirements apply to geographic restrictions within the US.
Designated contract markets have 30 days to remove non-compliant restrictions or explain why they cannot comply.
Exchanges must also ensure that intermediaries accessing their markets meet impartial access requirements.
The interpretation could intensify disputes between federal oversight and state gambling enforcement.
Existing court orders remain in place, and enforcement actions will be assessed on a case-by-case basis.

CFTC Sets 30-Day Deadline for Geographic Restrictions

According to the CFTC’s official announcement, the interpretation concerns Regulation 38.151(b), which requires designated contract markets (DCMs) to provide competitive, open, fair and impartial access to their markets.

Under the new guidance, DCMs must remove domestic geographic restrictions that breach these requirements within 30 days. Alternatively, they must explain to the CFTC’s Division of Market Oversight why compliance is not feasible.

The same timeframe applies to intermediaries, including firms providing customers with access to exchanges. DCMs are expected to ensure these intermediaries do not impose restrictions that undermine impartial access.

CFTC Chairman Michael S. Selig said: “Geographic access restrictions are inconsistent with those purposes and the Act’s impartial access requirements.”

The Commission did not identify specific exchanges or state restrictions in its announcement. It also confirmed that potential regulatory action would depend on individual circumstances.

Prediction Markets Face Federal and State Regulatory Conflicts

The interpretation comes amid ongoing legal disputes over whether federally regulated prediction markets can offer sports-related event contracts in states where gambling authorities consider them unauthorised betting products.

Several states have challenged these platforms, while the CFTC maintains that federally regulated derivatives markets operate under its jurisdiction.

As Ace Alliance previously reported, the DOJ and CFTC filed a lawsuit against Utah over the state’s enforcement of gambling restrictions against prediction markets.

The dispute followed an earlier Utah court ruling against Kalshi, which allowed state authorities to enforce gambling laws against the platform’s sports event contracts.

However, the latest CFTC interpretation does not automatically overturn those rulings or authorise exchanges to disregard existing court orders.

What the Interpretation Means for Prediction Market Operators

The guidance creates new compliance considerations for exchanges offering event contracts across multiple US jurisdictions.

Operators may need to review their geolocation controls, market access policies and intermediary agreements to determine whether existing restrictions conflict with federal requirements.

The distinction between traditional sportsbook products and exchange-traded derivatives remains important. The CFTC recently clarified how it treats licensed sportsbook wagers under its swap exclusion, reinforcing the different regulatory frameworks governing these products.

For prediction market operators, the immediate challenge is balancing federal access obligations with state-level enforcement risks.

The next development will depend on how exchanges respond within the 30-day period and whether further court decisions clarify the boundaries between federal derivatives regulation and state gambling laws.