Prediction Markets
We advocate for the responsible development and regulation of CFTC-regulated prediction markets as federally regulated derivatives markets that facilitate price discovery, risk management, and information aggregation.
The regulatory framework governing prediction markets is poorly understood by both consumers and legislators. Existing rules are broad and untailored — failing to account for the specific benefits and risks unique to prediction markets, creating uncertainty for participants and platforms alike.
We coordinate industry engagement, educate policymakers and regulators on the structure and public value of event contracts, and work to ensure prediction markets develop within a coherent national regulatory environment. Where helpful, we also provide guidance to courts through amicus briefs.
The Policy Issues
Industry and Technical Knowledge
Our Prediction Markets Working Group includes former CFTC staff, regulated designated contract markets (“DCM”s), futures commission merchants (“FCM”s), legal experts, and infrastructure service providers. Our work goes beyond general advocacy — we bring deep technical and legal understanding of how these markets operate and are regulated, ensuring the rules governing this growing industry are practical, targeted, and effective.
Market Integrity and Consumer Protections
For the public to trust that event contracts are fair, prediction markets must be built on strong foundations. We advocate for robust listing standards, anti-manipulation controls, transparency requirements, and margin and capital safeguards, consistent with derivatives market best practices, to ensure these markets earn and maintain the confidence of participants at every level.
Distinction from Gambling Frameworks
Just as futures were once described as “gambling on grain” prediction markets face opposition from certain states who view the products as gambling. We work to ensure policy frameworks reflect the meaningful differences between prediction markets structured on designated contract markets and traditional gambling, in governance, clearing, capital controls, and risk management, so these products are regulated appropriately, not punitively.
