CFTC拟订预测市场新规，重新界定哪些事件可上架、谁能参与

Original: Odaily Planet Daily (@OdailyChina)

Author: Asher (@Asher_0210)

The prediction market is facing a clearer set of regulations.

On June 10, the U.S. Commodity Futures Trading Commission (CFTC) issued a proposed rule to adjust the review process for event contracts. According to the CFTC announcement, the proposal will amend Regulation 40.11 and add Appendix F to assess whether event contracts in prediction markets involve terrorism, assassination, war, or illegal activities, and whether related contracts violate the public interest. Through this proposed rule, the CFTC is attempting to establish a judgment framework—determining which events can be financialized and which should be kept out of the market.

For the rapidly expanding prediction market, this proposed rule by the CFTC could be a critical turning point.

In recent years, the prediction market duopoly of Kalshi and Polymarket has continuously turned real-world events into tradable contracts, from presidential elections, macroeconomic data, and sporting events to entertainment programs and geopolitical events. Almost any verifiable outcome has the potential to be packaged into a "yes" or "no" trading market.

But as the scale has grown, problems have also begun to surface. Who can participate in trading? Which markets are easily manipulated? If someone knows the outcome in advance, or can even influence it, can prediction markets still be considered a fair market?

The CFTC's latest move is precisely aimed at answering these questions.

Not a One-Size-Fits-All, But a Contract-by-Contract Review

This CFTC issuance is not a simple statement, but a 267-page proposed rule document titled "Prediction Markets; Public Interest Determinations." In terms of its nature, it is a rulemaking proposal currently in the public comment period, not yet a formal rule in effect. In this document, the CFTC seeks to further clarify which event contracts may be deemed to violate the public interest and thus cannot be listed for trading or cleared on CFTC-registered entities.

From the design of the rules, the CFTC has not directly listed a complete prohibition list but opts for a contract-by-contract review. According to the document, this proposal intends to establish a structured framework for determining whether an event contract involves sensitive categories listed in the Commodity Exchange Act, including terrorism, assassination, war, and violations of federal or state law. If a contract involves these categories, the CFTC will further assess whether it violates the public interest.

Therefore, prediction markets are not automatically banned just by touching on sensitive events. The regulatory focus is on what the event actually predicts and whether the event might induce manipulation, harm, or illegal activity. For example, a market directly predicting whether a terrorist attack will occur somewhere would likely fall into the scope of strict review or even prohibition. However, if a market focuses on the volume of crude oil transported through the Strait of Hormuz over a certain period, even if this data could be affected by military situations, it essentially measures commercial shipping activity, not directly predicting war or terrorism.

The CFTC is not simply rejecting prediction markets but is attempting to distinguish between "predicting risk impacts" and "predicting the occurrence of harm." The former may still have informational value, while the latter more easily touches the bottom line of the public interest.

Sports Prediction Events May Be Preserved with Clearer Boundaries

What the outside world is most concerned about is whether sports prediction markets will be completely banned. Based on the current proposal, the signals from the CFTC are relatively positive—most prediction events centered on the overall outcome of sports competitions may still have clearer compliance space. The CFTC preliminarily believes that sports prediction events designed based on game scores, point spreads, win/loss results, advancement results, overall team or player statistics, and season performance may have price discovery functions and provide meaningful information.

Major sporting events like the World Cup, NBA, NFL, and MLB inherently attract high attention, generate high-frequency trading, and offer clear settlement conditions. They are a primary source of trading volume for prediction markets. If the relevant rules are finalized and confirm the compliance space for sports win/loss, advancement, and score markets, sports prediction events will remain the main battleground for platforms competing for users and liquidity.

However, this does not mean all sports-related markets will be given the green light. The CFTC also emphasizes that certain more granular markets or those more easily influenced by a small number of people may not serve the public interest. For instance, markets related to player injuries, on-field altercations, referee decisions, outcomes of minor sports events, and any market that could encourage cheating or harm to athletes may face stricter scrutiny.

The Real Target: "Those Who Know the Answer"

Compared to the sports market itself, insider trading and manipulation risks are the real issues this round of regulation aims to solve. Unlike traditional financial markets, many outcomes in prediction markets are not naturally generated externally but may be decided by an individual, institution, or a small group. Once these people participate in trading, the market is no longer just "predicting the future" but can become "cashing in on insider information ahead of time."

Recently, similar problems have emerged multiple times. Several suspected insider trading cases have appeared in prediction markets, including allegations that U.S. military personnel used information related to operations in Venezuela, a former U.S. congressman predicting he "would not attend Trump's State of the Union address," and a Google engineer using internal company tools to view data on the most searched person of 2025.

These incidents expose the core risk of prediction markets: some traders are not better at judgment but are inherently closer to the answer. This directly undermines market credibility, transforming prediction markets from information aggregation tools into insider arbitrage tools.

Clearer Regulatory Framework Doesn't Mean End of Controversy

However, the CFTC's proposal does not mean the debate over prediction markets is over. Currently, regulatory agencies in several U.S. states still oppose the CFTC's stance on sports prediction events, arguing that such events are essentially sports betting and platforms should not bypass the state's gambling regulatory system. Bill Miller, head of the American Gaming Association, also criticized the CFTC's proposal as redefining sports betting.

Behind this is a power struggle between federal regulation and state gambling oversight. If sports prediction events are classified as financial derivatives under CFTC jurisdiction, platforms could offer trading services to a broader user base through the federal framework. But if they are classified as sports betting, platforms must navigate the complex licensing, taxation, and consumer protection requirements of individual states.

Therefore, even if the relevant rules are finalized, legal controversies surrounding prediction markets will not disappear. Instead, they will further converge on one question—Can CFTC-regulated prediction markets bypass state-level gambling oversight and offer nationwide sports prediction trading?

Prediction Markets Are Becoming More Like Financial Markets

Returning to the proposal itself, the CFTC's attitude is already quite clear. Prediction markets will not be simply dismissed, but their gray areas are being redrawn.

Prediction events that have objective settlement standards, can provide informational value, and have relatively manageable manipulation risks may still have clearer compliance space. Conversely, markets easily influenced by a few, likely to induce harm, or involving non-public information will become regulatory priorities.

This also means the next phase for prediction markets is not about greater freedom, but about more institutionalization.

Before this, the expansion of prediction markets relied more on hot topics, traffic, and the volume of markets. After this, whether a platform can continue to grow will increasingly depend on its ability to prove market fairness, settlement transparency, and risk control. This CFTC proposal may not be the brakes for prediction markets, but rather a dividing line—the industry is moving from gray-area expansion towards rule-based competition more akin to financial markets.