CFTC No-Action Relief Opens Path for Prediction Markets

Railbird has yet to debut its live platform but is reportedly in discussions with DraftKings, which is exploring a potential entry into prediction markets.

Ziv Chen

Last Updated: August 11, 2025 3:40 PM EDT • 2 minute read

CFTC No-Action Relief Opens Path for Railbird Prediction Markets — Pictured: The logo of prediction market company Polymarket. Photo by Timon Schneider / SOPA Images via Sipa USA.

The Commodity Futures Trading Commission (CFTC) has granted no-action relief to Railbird and QC Clearing LLC (QCEX), enabling both companies to operate and compete with the best prediction markets without adhering to certain swap reporting and recordkeeping requirements. The regulator stated that this position applies only in limited cases, but the move signals continued regulatory flexibility toward the sector.

Both Railbird and QCEX already hold CFTC licenses to offer event contracts.

Railbird has yet to debut its live platform but is reportedly in discussions with DraftKings, which is exploring a potential entry into prediction markets. The platform, licensed in June, plans to launch later this year. DraftKings CEO Jason Robins, speaking on the company's Q2 earnings call, expressed interest in the sector but stressed the value of observing early market entrants before committing.

QCEX has been acquired by Polymarket in a $112 million deal, marking the platform's return to the US market after a 2022 CFTC enforcement action forced its exit. Founder Shayne Coplan said the acquisition provides a compliant route for Polymarket to operate in the US, citing rising demand for prediction markets from traders and mainstream audiences.

DraftKings CEO criticizes gambling tax provision

DraftKings' potential move into prediction markets comes as Robins voiced concerns over a recent change to gambling tax deductions introduced under President Donald Trump's budget legislation. In a CNBC interview, Robins described the provision as illogical, noting that gamblers can now deduct only 90% of their losses from winnings rather than the full amount.

Previously, tax liability applied only to net winnings. Under the new rule, a player who wins $1,000 and loses the same amount could deduct just $900 in losses, resulting in taxable income of $100. Robins suggested the change was likely the result of a technical adjustment to comply with the Byrd rule, which limits unrelated measures in budget reconciliation bills.

He also said that lawmakers are willing to rethink the policy and that the company is talking with Congress about it. Robins also remained upbeat about the future legalization of sports betting, forecasting its ultimate adoption in the majority of US states, including big markets like California and Texas.

Polymarket valuation and stablecoin demand surge

As DraftKings evaluates prediction market opportunities, Polymarket seeks a $1 billion valuation in a funding round led by Founders Fund. The platform's growth has fueled significant demand for USDC, the stablecoin used to settle all trades on its Polygon-based infrastructure.

Polymarket's high-frequency settlement model rapidly cycles capital through continuous trading and redeployment, generating substantial transaction activity. The platform has processed over $14 billion in total trading volume, with $1 billion cleared in May alone and daily active traders averaging between 20,000 and 30,000.

Following Donald Trump's re-election in November 2024, monthly volume spiked to $2.5 billion, driving surges in USDC transfers and blockchain bridge activity.

Written by:
Ziv Chen

Ziv has over two decades of experience in the igaming and sports betting industry, having served in senior marketing and business development positions with both B2C and B2B companies, including Playtech and Microgaming. In 2019, Ziv decided to pursue his passion for writing and became a fulltime industry journalist, covering casino, sports, and gambling business news. He’s specialties include casino games and technology, US state gambling regulation, company performance, as well as gambling affiliates and marketing. As a Pitt graduate, Ziv is a diehard fan of all Pittsburgh sports teams, with the Steelers at the top of the list. In his free time, he enjoys reading crime fiction, biographies (mainly of sports personalities, but not only) and American history. Ziv’s Favorite quote: “We're going to pursue perfection, knowing full well we won't catch it, but we're going to relentlessly chase it," Mike Tomlin, Pittsburgh Steelers Head Coach.