How event contracts get listed: Self-certification

A US exchange can list a new prediction market by filing a form saying the contract complies with the law, and start trading the next day. No approval required. Behind that speed sits a trapdoor written into Dodd-Frank, three undefined words, and a rulemaking the CFTC opened this June to finally settle what they mean. Summary Under CFTC Rule 40.2, a registered exchange may list a new event contract by self-certifying that it complies with the Commodity Exchange Act, without waiting for Commission approval, which is why new markets can appear within days of a news event. The Dodd-Frank Act added a Special Rule letting the CFTC prohibit event contracts that involve enumerated activities, unlawful activity, terrorism, assassination, war, or gaming, when they are contrary to the public interest. Rule 40.11 implements it as a 90-day review during which the Commission may request suspension of trading and must issue an order by day 90, with silence meaning the contract continues. The statute never defined “involve,” “gaming,” or “public interest,” and that vacuum produced the 2023 order barring Kalshi’s congressional-control contracts, the litigation that followed, and a proposed categor...