TLDR
- The CFTC asked for public input on prediction market rules and most comments so far have been critical
- U.S. Senators, lawyers, and academics argue prediction markets resemble gambling more than financial tools
- Retail comments surged from 19 to over 750 after early April, with strong anti-gambling sentiment
- Many submissions warn about manipulation, insider trading, and risks tied to political or military contracts
- A large portion of retail comments used identical wording, linked to advocacy group More Perfect Union
The Commodity Futures Trading Commission is getting an earful from the public over its proposed prediction market rules. And most of what people are saying is not positive.
The CFTC opened a comment period earlier this year as part of an Advance Notice of Proposed Rulemaking. The goal was to gather feedback on how event contracts should be regulated under the Commodity Exchange Act.
What came back was a flood of opposition from lawmakers, legal experts, academics, and everyday citizens.
Lawmakers and Institutions Push Back
U.S. Senators Jack Reed and John Hickenlooper were among the first to weigh in. Their letter raised concerns about manipulation and threats to public trust, especially for contracts tied to political events.
Law firms and attorneys also filed comments questioning whether event contracts belong under derivatives regulation at all. Several argued that these products look more like gambling aimed at retail users.
The National Thoroughbred Racing Association said event contracts tied to horse racing would violate the Interstate Horseracing Act. The group urged the CFTC to use its authority to block them.
NCAA President Charlie Baker followed up on an earlier letter asking the CFTC to suspend contracts linked to college sports. He pointed to integrity risks and the potential for insider trading.
Seton Hall law professor Ilya Beylin submitted academic commentary arguing that many contracts “overwhelmingly serve an entertainment purpose.” He said they lack real utility for managing risk.
Beylin also warned that certain contracts are “especially poor at managing risk” and face heightened risks of manipulation and insider trading.
Across these submissions, the common concern was clear. Critics say many prediction market products do not meet the public interest standard set out in the Commodity Exchange Act.
Retail Comments Flood In After April 2
Before April 2, only 19 comments had been filed. After that date, the number surged past 750.
Many retail commenters were blunt. One wrote that prediction markets are “gambling, pure and simple” and called for an outright ban.
Others focused on the risk of manipulation. One submission said prediction markets “are uncharted territory and can affect market integrity.” The commenter added, “It is a given that this will be manipulated.”
A recurring theme was opposition to contracts tied to political or military outcomes. One person asked the CFTC to ban event contracts related to military operations and government policy decisions, citing insider information risks.
Another commenter called prediction markets “a dangerously addicting form of gambling” and urged the agency to “protect the future generation.”
A large share of the retail comments used identical language. Many listed their organization as More Perfect Union, a nonprofit focused on working-class advocacy. Coordinated submissions are common in federal rulemakings, but the pattern highlights how one-sided the public feedback has been.
The CFTC is still reviewing all comments. The agency wants to know whether these contracts help businesses manage risk or are mainly for entertainment. It is also asking how to spot manipulation, what the public interest standard should look like, and whether retail users need more protection.
At the time of writing, the CFTC docket had received over 750 public comments, with the agency still working to distinguish between financial derivatives and products that resemble gambling.
