CFTC Proposes Limits on Prediction-Market Contracts

The Commodity Futures Trading Commission on June 10, 2026 proposed a set of rules defining which prediction-market event contracts a registered exchange may list and a clearinghouse may accept. The agency released a 267-page notice titled “Prediction Markets; Public Interest Determinations” and opened a 45-day public comment period.

The proposal says most traditional sports contracts that settle on final scores, tournament advancement or season-long statistics would generally be allowed because prices in those markets tend to reflect broader information and are less vulnerable to manipulation. By contrast, the agency flagged narrowly focused micro-bets as vulnerable to abuse, giving examples such as wagers on the result of a single baseball pitch or a specific player’s particular shot.

The draft lists categories that would likely be found contrary to the public interest: contracts tied to player injuries, officiating outcomes, physical altercations, pre‑collegiate sports events and markets linked to war, terrorism or assassination. The notice sets out factors the Commission will weigh when judging any contract rather than imposing automatic bans on whole classes of contracts.

If the Commission finds a contract crosses the public-interest threshold, a registered exchange would be barred from listing it and a clearinghouse barred from accepting it. The proposal describes the agency’s approach for making those determinations and the enforcement steps the Commission could take against platforms that list or clear contracts deemed contrary to the public interest.

CFTC Chairman Mike Selig called the proposal “a durable, transparent framework to identify the contracts Congress directed us to scrutinize while letting legitimate markets move forward.” The release follows an advance notice of proposed rulemaking issued in March 2026 and reflects input the agency received during that earlier outreach.

The agency’s analysis rests on the idea that prediction markets provide value when participants can meaningfully forecast outcomes and aggregate useful information into prices. The notice argues many micro-bets lack predictive content because outcomes are too narrowly defined for participants to contribute reliable information, and those markets therefore carry higher manipulation risk. Political-election contracts receive a different treatment in the proposal: the document explains election outcomes are determined by voters and do not resemble contests of chance or skill in the same way game-show or random events do.

The proposal comes as prediction markets have expanded rapidly. Trading volume across registered contract markets exceeded $25 billion in April, driven by platforms offering contracts tied to elections, economic releases, cultural trends and sporting events. The CFTC’s rulemaking marks a shift from earlier enforcement actions and follows the withdrawal of a 2024 proposed rule that would have broadly restricted event contracts. State gambling regulators and state attorneys general have also increased scrutiny of some platforms, and legal observers say disputes over which regulator has final authority could reach the Supreme Court.

Market participants, state regulators and public-interest groups may file comments during the 45-day period before the Commission considers a final rule.