Key Takeaways
- • Andreessen Horowitz filed a formal comment with the CFTC on April 30, 2026 (the final day of the public comment window), calling for revision of Rule 40.11 to replace blanket prohibitions on certain event contracts with individual case-by-case public interest determinations.
- • a16z argues that classifying event contracts as CFTC-regulated derivatives would preempt state gambling statutes for contracts listed on designated contract markets, resolving a direct jurisdiction conflict illustrated by the U.S. government's April 2, 2026 lawsuit against Arizona, Connecticut, and Illinois for attempting state-level regulation of prediction markets.
- • The filing emphasizes coordination between the CFTC and SEC through their recently signed memorandum of understanding, positioning federal regulatory harmonization as critical to clarifying the prediction-market regulatory framework.
- • Rule 40.11's current blanket-ban approach creates legal uncertainty that inhibits growth in prediction-market platforms, according to a16z's framing of the issue.
Summary
Andreessen Horowitz submitted formal comments to the Commodity Futures Trading Commission on April 30, 2026, urging a comprehensive rewrite of the federal rule governing prediction-market event contracts. The filing arrived on the final day of the CFTC's public comment window for its Prediction Markets Advanced Notice of Proposed Rulemaking, which opened on March 12, 2026, signaling the firm's priority engagement with this emerging regulatory matter.
The core of a16z's request targets CFTC Rule 40.11, the provision that currently applies blanket prohibitions to certain categories of event contracts rather than subjecting them to individualized review. The firm argues that Rule 40.11 should be revised to mandate "a robust and clearly articulated, case-by-case public interest determination" for event contracts within listed categories, replacing the categorical prohibition approach with a more granular evaluation framework.
a16z's legal strategy involves classifying event contracts as swaps or other CFTC-regulated derivatives, a framing with significant jurisdictional consequences. If event contracts qualify as derivatives under federal law, state gambling statutes would be preempted for contracts listed on designated contract markets. This preemption argument addresses a live policy conflict: on April 2, 2026, the U.S. government sued Arizona, Connecticut, and Illinois after those states attempted to regulate prediction-market event contracts under state gambling law. a16z's filing implicitly positions federal derivative regulation as the appropriate mechanism to resolve this interstate conflict and provide legal clarity.
The filing also emphasizes the importance of regulatory coordination between the CFTC and SEC through their recently signed memorandum of understanding, suggesting that unified federal oversight could establish a more predictable framework for the rapidly growing prediction-market sector. This approach addresses both the legal uncertainty created by Rule 40.11's blanket prohibitions and the jurisdictional friction created by conflicting state regulations.
The core of a16z's request targets CFTC Rule 40.11, the provision that currently applies blanket prohibitions to certain categories of event contracts rather than subjecting them to individualized review. The firm argues that Rule 40.11 should be revised to mandate "a robust and clearly articulated, case-by-case public interest determination" for event contracts within listed categories, replacing the categorical prohibition approach with a more granular evaluation framework.
a16z's legal strategy involves classifying event contracts as swaps or other CFTC-regulated derivatives, a framing with significant jurisdictional consequences. If event contracts qualify as derivatives under federal law, state gambling statutes would be preempted for contracts listed on designated contract markets. This preemption argument addresses a live policy conflict: on April 2, 2026, the U.S. government sued Arizona, Connecticut, and Illinois after those states attempted to regulate prediction-market event contracts under state gambling law. a16z's filing implicitly positions federal derivative regulation as the appropriate mechanism to resolve this interstate conflict and provide legal clarity.
The filing also emphasizes the importance of regulatory coordination between the CFTC and SEC through their recently signed memorandum of understanding, suggesting that unified federal oversight could establish a more predictable framework for the rapidly growing prediction-market sector. This approach addresses both the legal uncertainty created by Rule 40.11's blanket prohibitions and the jurisdictional friction created by conflicting state regulations.
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