CFTC signals new prediction markets guidance as battle intensifies

"We're going to be setting very clear standards as to the types of prediction markets that can be self-certified in our markets. We're also planning to move forward with an advanced notice of proposed rulemaking in the near future that will set the stage for more fulsome rulemaking."

"They're treated just like any other futures exchange, where we have clearing, we have certain risk controls, there's advertising and marketing requirements on the brokers."

"We are going out with guidance in the very near future, so please stay tuned. We're going to be setting very clear standards as to what can be self-certified in our markets and what cannot, and how to evaluate the different products that are offered in the space."

The CFTC is developing new regulatory guidance and initiating a formal rulemaking process for prediction markets to address ongoing debate about their classification as financial exchanges versus gambling platforms. CFTC Chairman Mike Selig announced the agency will establish clear standards for which prediction market contracts can be self-certified on regulated exchanges and how products should be evaluated. Prediction markets allow traders to buy and sell contracts tied to specific outcomes including political events, economic indicators, and geopolitical developments. The CFTC treats these markets like traditional futures exchanges, implementing clearing mechanisms, risk controls, and advertising requirements. The agency plans to publish guidance soon and advance a notice of proposed rulemaking to enable comprehensive regulatory framework development.

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