CFTC Deadline Brings 1,330+ Comments on Prediction Markets

The Commodity Futures Trading Commission’s public comment period on prediction market regulation closed April 30 with more than 1,330 submissions to the agency’s Advance Notice of Proposed Rulemaking on event contracts under the Commodity Exchange Act. Submissions rose sharply at the deadline, with more than 80 filings arriving the day before and over 60 logged by 12 p.m. ET on April 30.

Professional organizations and advocacy groups raised concerns about market integrity and consumer protection. The Institute of Internal Auditors warned of “serious concerns about the potential misuse of material nonpublic information” and recommended independent audit functions for prediction market platforms to ensure rules are followed. The National Council on Problem Gambling characterized event contract trading as “functionally gambling,” saying markets contain “the three core elements of gambling: consideration, chance, and prize,” and urged limits on margin trading and protections for minors.

Several tribal governments filed late comments asking that event contracts be treated as gambling rather than federal derivatives. The Fort McDowell Yavapai Nation described certain event contracts as interstate wagers. The Prairie Band Potawatomi Tribal Gaming Commission requested the CFTC delay rulemaking and consult further with tribal regulators. Industry groups raised similar concerns; the Casino Association of New Jersey called some prediction markets “functionally indistinguishable” from regulated sports betting and warned they could divert revenue from licensed operators. Senator Catherine Cortez Masto wrote that “event contracts dealing with sports and casino games are nothing more than gambling and fall entirely within the jurisdiction of tribes and states.”

Academic submissions ranged from supportive to critical. Harry Crane of Rutgers highlighted prediction markets’ use in aggregating dispersed information to produce probabilistic forecasts. Michael Li, an incoming Harvard Kennedy School student, called for a more nuanced evaluation based on information structure and manipulation risk. William Mayew of Duke reported that market prices are informative but that their additional value beyond existing disclosures is “economically modest.”

Other scholars flagged structural risks. Columbia Law professor Joshua Mitts identified roughly $143 million in what he described as “anomalous” profits tied to suspicious activity across prediction markets and warned that markets give incentives to information-advantaged participants. Legal scholar Melinda Roth supported CFTC oversight and recommended “guard rails” for products that settle based on decisions of an individual or a small group.

Supporters of prediction markets asked for regulation rather than prohibition and proposed measures such as enhanced surveillance to detect insider trading, clearer contract design and resolution standards, and differentiation between higher- and lower-risk event categories. Some filings cautioned that strict limits could push users to offshore platforms.

The comment record also addressed an AI-assisted submission tool created by a prediction market operator. Tests of the tool found about 15 of the last 120 comments were submitted through the operator’s page, indicating a limited share of the overall filings.

The CFTC will review the ANPRM comments as it decides whether to propose specific rules or other regulatory actions governing event contracts.