The Commodity Futures Trading Commission (CFTC) has issued an advisory to prediction market operators as it aims to create protections against manipulation and considers which contracts should be prohibited in the public interest, such as wagering money on assassination or acts of war.
The CFTC is in charge of regulating prediction platforms, which have come under fire for their sports event contracts and other controversial markets, and has called for public comment ahead of a regulatory proposal.
Key Takeaways
- The CFTC is considering if certain markets are in the public interest.
- Sports event contracts are being challenged in more than a dozen states.
- Comments must be submitted within 45 days of the Advance Notice of Proposed Rulemaking’s publication.
Prediction contract trading gained significant popularity in 2025 and early 2026. Sports event contracts introduced prediction markets to a new audience, while markets in politics, entertainment, and finance continued to serve the platforms’ core base.
Amid the surge in visibility, the CFTC is looking for input from the public on the offerings by licensed platforms.
“Today’s action is an important step in the Commission’s continued effort to promote responsible innovation in our derivatives markets,” said Chairman Michael S. Selig.
“This begins the process of new rulemaking grounded in a rational and coherent interpretation of the Commodity Exchange Act, while reassuring the American people that the CFTC will exercise its exclusive jurisdiction over prediction markets.”
The Advance Notice of Proposed Rulemaking (ANPRM) aims to procure insight into the core principles of regulations enforced by the CFTC, including allowed and prohibited markets. The CFTC also left an open-ended mention of “other topics” that could also be reviewed.
Information received will be used to guide future decisions and objectives, including the creation and enforcement of guidelines for licensed prediction platforms.
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Public input could shift regulation
The CFTC noted that it may determine an event contract is “contrary to the public interest” if it involves sensitive events, such as an assassination, war, or acts of terror. If an event is determined to be against public interest, it will be banned from the prediction platforms’ catalog of available markets.
Designated Contract Market (DCM) Core Principle 3 also only permits platforms to offer contracts that are not “readily susceptible” to manipulation. Essentially, platforms cannot allow users to buy and sell contracts that might fall victim to nefarious tampering.
The CFTC also said that ongoing disputes over sports event contracts are active and need to be settled. Rather than suggest that those markets could be closed, however, the federal regulator said that cooperation between sports leagues and entities with the CFTC could lead to enhanced regulatory oversight.
All comments must be submitted in writing within 45 days of the ANPRM’s publication in the Federal Register. The CFTC information should be sent with the understanding that it could be publicized.
A petition to keep sensitive information out of the public eye may be submitted if the sender believes it is necessary or appropriate.
Uncertain times for prediction platforms
The rapid growth in popularity of prediction markets has brought more eyes to their offerings, many of which have proven to be divisive.
Earlier this month, Polymarket removed a market that had existed for years and allowed users to buy and sell contracts predicting if a nuclear warhead would be detonated in an act of war. That was just two months after the platform faced scrutiny for allowing trades on military action, including the capture of then-Venezuelan President Nicolás Maduro.
More than a dozen states are also challenging the merits of sports event contracts, which many state regulators have argued represent a form of sports betting.
