CFTC Chairman Michael Selig has outlined a three-part plan for regulating prediction markets. He presented the roadmap at the agency's first Innovation Advisory Committee meeting on August 20, 2026.
The plan marks a move beyond the CFTC's recent efforts to defend prediction markets against state regulators. Instead, the agency is now working on building a long-term federal framework for the industry.
What the Three-Part Plan Involves
Selig's plan focuses on three areas:
- Defining which event contracts need closer review:
The CFTC proposed a new framework in June 2026 for deciding whether contracts involve areas such as illegal activity, terrorism, assassination, war, or gaming, or whether they go against the public interest. Selig said the term “gaming” still needs a clear definition, as contracts could otherwise be rejected based on inconsistent or politically influenced decisions.
- Updating reporting requirements:
The CFTC wants to modernize reporting rules for fully collateralized event contracts, the aim being to give regulators the information they need while reducing unnecessary compliance work for prediction market platforms.
- Updating rules for exchange-listed contracts:
The CFTC also plans to revise the rules that apply to designated contract markets (DCMs) offering event contracts. The changes would cover areas such as consumer protection, product oversight, market design and customer incentive programs.
Why the CFTC Is Taking Action
The roadmap comes after a busy year for prediction market regulation. The agency began working on a new regulatory framework, issuing an Advance Notice of Proposed Rulemaking in March, followed by a formal proposed rule in June.
Meanwhile, prediction markets have continued to grow rapidly: trading volume increased from less than $1 billion in June 2024 to almost $24 billion in April 2026. The number of contracts traded each month also increased substantially, from around 220 in 2021 to over 8000 in May 2026.
Concerns From the Industry
The meeting also highlighted concerns about how prediction markets are currently regulated. CME Group CEO Terry Duffy cited that over 2,500 event contracts had been self-certified by designated contract markets since January 2025, without a single one being challenged.
He went on to argue that some of these contracts may not meet the CFTC's existing safeguards against market manipulation and pointed to recent insider-trading controversies as an example.
Committee members also raised concerns about the self-certification process and the rise of “mention markets.” These are contracts based on whether certain words or phrases appear in a speech, earnings call, or other events, with several opinions that these markets could be particularly vulnerable to manipulation.
What's Next?
Selig’s roadmap does not settle the CFTC's separate legal battles with individual states over who has authority to regulate prediction markets.
It does, however, show that the CFTC plans to continue developing federal rules while those court cases move forward. If the proposals become law, they could give prediction market platforms clearer rules on which contracts they can offer and how those markets must be overseen.
Our full
list of prediction markets
is worth checking out for an overview of which states the different platforms operate within.
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