Federal regulators have launched a new step toward shaping oversight of prediction markets, opening a public consultation on how event contracts traded on these platforms should be regulated.
The Commodity Futures Trading Commission published an Advanced Notice of Proposed Rulemaking that asks for public feedback on whether new regulations or amendments are needed for prediction market activity. The notice invites comments on how existing laws apply to event contracts and which types of contracts may conflict with the public interest.
CFTC Chairman Michael S. Selig said the initiative marks the beginning of a broader rulemaking process focused on the growing sector. “Today’s action is an important step in the Commission’s continued effort to promote responsible innovation in our derivatives markets,” Selig said. “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 commission is requesting written submissions within 45 days after the notice appears in the Federal Register. Comments can be submitted through the CFTC’s public comments portal.
Wide Range of Questions in Notice
The 32-page notice contains numerous questions covering how prediction markets function and how federal law should apply to them. Regulators are asking for public input on topics including the risk of market manipulation, cost-benefit considerations, and how statutory principles under the Commodity Exchange Act should apply to event contracts.
The commission also asks respondents to comment on contracts involving sensitive subjects such as war, terrorism, assassination, and gaming. Officials are requesting help defining these terms and determining how they should apply when evaluating prediction market listings.
Another area of focus involves insider trading and the potential use of nonpublic information. Regulators are asking whether individuals with an “asymmetric information advantage” should be permitted to trade on certain contracts, while acknowledging the potential risks of unfair practices.
The notice also raises questions about responsible gaming practices. Topics include self-exclusion programs, spending and time limits, warning notices, and restrictions on advertising.
Legislative Proposals Add Pressure
At the same time, lawmakers have introduced several bills aimed at tightening rules for prediction markets.
One proposal, the Prediction Markets Security and Integrity Act of 2026, seeks to introduce consumer safeguards and prohibit certain listings. According to the bill text: “An individual or operator of an online prediction market shall not—(1) use material, nonpublic information for private gain in wagering on an online prediction market; or (2) create or participate in listings or wagers on an online prediction market that would present a conflict of interest.”
Several other measures have also appeared in Congress this year. One proposal would prohibit federal officials from trading contracts connected to government actions if they possess nonpublic information, while another aims to stop members of Congress and other senior officials from participating in event contract trading.
With regulators gathering public comments and lawmakers advancing multiple bills, prediction markets now face increased scrutiny as officials decide how these platforms should operate within the broader financial system.
Source:
“CFTC Seeks Public Comment on Advanced Notice of Proposed Rulemaking Relating to Prediction Markets”, cftc.gov, March 12, 2026
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