CFTC Places Stipulations on Prediction Markets
Mike Goodpaster Published 11/06/2026
The Commodities Futures Trading Commission (CFTC), the federal regulator of prediction markets, has provided clearer parameters of what will be allowed and what will be prohibited from offer through event contracts on these sites. Regulators want to be granted the ability to block event contracts that it feels aren't in the public interest.
The CFTC also wants to prohibit event contracts that would appear to be more likely to be manipulated, or to be instances in which one person could make a significant impact on the outcome. It also indicated that every event contract offered would be reviewed individually before being approved.
The CFTC will place restrictions on certain sports event contracts
On Wednesday, the CFTC unveiled a 267-page proposal. The promise is that this proposal is offering a more careful definition of how the implementation of rules governing prediction markets would take place. It also outlined the exact types of event contracts that could be offered. Defining which event contracts would be forbidden was also undertaken.
“The CFTC will protect the integrity of our regulated markets without standing in the way of responsible innovation,” CFTC Chairman Michael S. Selig said in a statement. “This proposal gives the Commission a durable, transparent framework to identify the contracts Congress directed us to scrutinize while letting legitimate markets move forward.”
Very few changes involving sports-event contracts are on the agenda
From a sports-event contract viewpoint, state sports betting regulators were expressing disappointment. The vast majority of these plays will continue to be given approval. Few changes were anticipated, though. Sports-event contracts are proving to be massive profit drivers for prediction market sites.
"This is a remarkable attempt to redefine what constitutes sports betting," American Gaming Association president Bill Miller said in a statement.
The CFTC was determining that sports-event contracts involving officiating decisions and player injuries would no longer be permissable. The leaders of both the NBA and the NFL had requested that the CFTC make these changes.
"The agency...proposed amendments identifying categories of gaming-related contracts that pose heightened public policy risks, like player-injury contracts, officiating and altercation contracts, pre-collegiate sports contracts, and casino-style games of chance," Selig said in a statement.
Overall, the CFTC defended the right of prediction market sites to offer sports-event contracts.
"Anyone interested in that team as an economic enterprise can use information derived from those event contracts as one factor in economic decision-making on a variety of topics," the CFTC's document read. "Just as the corn futures market is about more than just corn, a prediction market about one sporting event is about more than just that sporting event."
The CFTC would also ban certain military event contracts
Beyond sports, there were other event contracts that the CFTC found problematic. The federal regulator would also move to ban event contracts involving terrorism, assassination, and war. Any conduct that is clearly unlawful under federal or state law is also out.
Selig made it clear that he didn't feel it was his responsibility to overregulate prediction market sites.
"As Chairman of the CFTC, my job is to safeguard the integrity of the markets Congress has entrusted the CFTC to oversee, not to decide which ones should or should not exist," Selig wrote. "Prediction markets fall squarely within this oversight.
"Under my leadership, the CFTC is not only modernizing the rules that govern these markets but is also reinforcing its statutory authority to ensure that responsible innovation takes place on American soil and under the CFTC’s federal regulatory framework."
None of these decisions will see immediate implementation. The CFTC is offering a 45-day window. During this time, it will welcome public comments on the proposed rules before implementing any changes.