CFTC Gives Prediction Markets 30 Days to Remove Geofencing Restrictions
United States.- 10 November 2026 | www.zonadeazar.com The US Commodity Futures Trading Commission (CFTC) has given registered prediction market exchanges 30 days to remove geographic restrictions that violate federal impartial access requirements.
The directive, announced on 5 November 2026, could create further conflicts between federal regulators and state courts that have ordered restrictions on certain sports event contracts.
The measure applies to Designated Contract Markets (DCMs), a regulatory category that includes platforms such as Kalshi.
New Requirements for Registered Exchanges
The CFTC issued an interpretation of Regulation 38.151(b), which requires registered exchanges to provide competitive, open, fair and impartial market access.
Operators must either:
- Remove domestic geographic restrictions that violate these requirements.
- Submit a written explanation outlining why compliance is not feasible.
The deadline also applies to intermediaries providing access to registered exchanges.
The regulator will assess individual circumstances before determining whether further action is necessary.
Michael Selig Supports Nationwide Access
Michael Selig, Chairman of the CFTC, argued that derivatives markets should operate under consistent conditions throughout the United States.
According to the regulator, restrictions based on customers’ locations can undermine market integrity and efficiency.
The interpretation aims to prevent otherwise eligible market participants from facing access limitations solely because of their location within the country.
Kalshi Faces State-Level Restrictions
The directive could complicate the position of Kalshi, which is involved in several legal disputes concerning sports event contracts.
Courts in states including Nevada, Michigan and Washington have imposed restrictions affecting prediction market operations.
Furthermore, on 4 November, a federal appeals court ordered Kalshi to implement geographic restrictions preventing access to its contracts on tribal lands in California.
These decisions create difficulties for platforms attempting to comply with federal regulatory requirements and state-level court orders simultaneously.
Polymarket and Crypto.com Also Affected
The controversy extends to other companies offering sports-related event contracts.
Polymarket and Crypto.com, alongside Kalshi, have withdrawn certain products from states including Michigan in response to judicial decisions.
The CFTC’s new interpretation could require operators to reconsider these restrictions or formally explain why they must remain in place.
However, the directive does not automatically overturn existing court orders.
Adam Schiff Criticises the Decision
California Democratic Senator Adam Schiff criticised the CFTC’s interpretation.
The lawmaker argues that sports prediction contracts must respect state gambling legislation and tribal regulatory rights.
Schiff warned that the federal directive could conflict with court decisions restricting these activities.
His comments reflect ongoing disagreements between federal authorities, states and tribal representatives over prediction market regulation.
DraftKings Expects Limited Impact
Jason Robins, CEO of DraftKings, addressed the guidance during the company’s earnings call on 6 November.
He indicated that he does not expect the measure to significantly affect DraftKings’ operations.
The company, which holds DCM status, does not offer sports event contracts in states where it maintains traditional sports betting licences.
Robins explained that exchanges have a process for demonstrating why geographic restrictions are necessary and expressed confidence in resolving any concerns with the CFTC.
Uncertainty Over Conflicting Court Orders
The federal interpretation does not specify how platforms should resolve situations where CFTC requirements conflict with state court orders.
It also does not establish potential penalties for non-compliance.
This uncertainty represents a significant challenge for businesses operating across multiple jurisdictions.
The CFTC confirmed that it will consider the circumstances of individual cases before taking regulatory action.
Industry Impact and Next Steps
The directive intensifies the debate over the division of authority between federal derivatives regulation and state sports betting laws.
Prediction market platforms will need to review their geofencing arrangements and determine whether federal requirements can be met without violating existing court orders.
With 30 days to remove non-compliant restrictions or provide written explanations, the CFTC is seeking nationwide consistency in prediction market access amid continuing disputes with state regulators.
The deadline falls on 5 December 2026.
Edited by: Cristobal R.
