The US Commodity Futures Trading Commission has issued new guidance for exchanges listing prediction markets and opened a consultation on whether additional rules are needed for event-based derivatives.
CFTC Seeks Input on Gambling, Insider Trading Risks in Prediction Markets
12 March 2026 - 22:17 CET
By Ana Pereira
The agency’s Division of Market Oversight published an advisory on 12 Mar outlining how designated contract markets (DCMs) should evaluate and oversee "event contracts," derivatives whose payouts depend on the outcomes of real-world events
Separately, the commission published an advanced notice of proposed rulemaking seeking public comment on whether current derivatives regulations adequately address prediction markets or whether new rules should be developed.
Policy questions
The notice raises a range of policy questions about how prediction markets should be regulated as they move further into the financial mainstream.
Among them is whether some event contracts resemble gambling, referred to in the Commodity Exchange Act as "gaming," and how they should be treated under derivatives rules.
The commission is also seeking views on the role of insider trading in prediction markets, including whether traders with advance knowledge about an event's outcome improve price discovery, or instead create risks of manipulation and unfair trading.
Other questions explore whether contracts tied to events controlled by a small group of individuals are more vulnerable to market abuse and whether prediction markets, which currently require fully collateralized positions, should eventually allow trading on margin.
"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," said the agency's Chair Michael Selig.
Prediction markets boom
The consultation comes as prediction markets have expanded rapidly. Exchanges listed an average of about five event contracts per year between 2006 and 2020, but that number rose to 131 in 2021 and reached roughly 1,600 contracts in 2025, according to the CFTC.
The agency also said the number of applications to operate prediction markets has more than doubled over the past year as firms seek to launch platforms focused primarily on event-based trading.
Public comments will be accepted for 45 days after the notice is published in the Federal Register.
Congress weighs in
The CFTC’s move comes as prediction markets face increasing scrutiny from policymakers.
Lawmakers this week introduced legislation that would prohibit certain event contracts tied to events such as death, war or assassination, arguing that such markets could create harmful incentives or raise ethical concerns.
The commission's consultation similarly asks market participants to weigh in on which types of event contracts may conflict with the public interest and how regulators should approach oversight of the sector.
