The regulatory fog has lifted. On December 2nd, 2025, the CFTC released its final guidance on "Event Contracts," effectively ending the era of regulation-by-enforcement that plagued the industry through 2024. The new framework, dubbed "Regulation E," provides a clear path to compliance for platforms listing political and social outcome markets.
Key Provisions
- Political Markets Allowed: Contrary to early fears, election markets are explicitly permitted for regulated exchanges, provided they adhere to strict anti-manipulation caps.
- The "Public Utility" Test: Contracts must demonstrate a "public utility" related to hedging or price discovery. This formalizes the argument that election odds provide valuable societal data.
- KYC/AML Requirements: All US-facing platforms must implement standard financial surveillance, effectively barring "anonymous" DeFi front-ends from legally soliciting US customers without licensure.
Industry Reaction
Kalshi CEO Tarek Mansour called it "the moment we've been waiting for since 2018." Polymarket, which agreed to a landmark settlement earlier this year to re-enter the US market, stated that the rules "vindicate the power of free markets to reveal truth." Volume on regulated US exchanges surged 200% in the week following the announcement.