CFTC Staff Issues Prediction Markets Advisory on DCM Obligations, United States, March 2026

On March 12, 2026, the Commodity Futures Trading Commission's Division of Market Oversight issued a prediction markets advisory (Release No. 9193-26) addressing the listing for trading of event contracts on designated contract markets. The advisory is a staff-level guidance document and is not a final rule or binding regulation. It takes effect immediately upon issuance and applies to all existing and prospective DCMs listing event contracts.

The advisory identifies three controlling authorities. First, CEA Section 5(d) and Commission Part 38 establish the core principles all DCMs must satisfy as front-line self-regulators. Second, DCM Core Principle 3 and its Appendix C guidance require DCMs to take proactive steps to ensure that listed contracts are not susceptible to manipulation. Third, the advisory underscores existing product-submission requirements under Part 40, which oblige DCMs to certify that new contracts comply with the CEA before listing. The advisory explicitly discusses nuances applicable to sports-related event contracts, noting that the public-interest prohibition in CEA Section 5c(c)(5)(C) remains the applicable standard for determining whether a sports contract may be listed.

DCMs that list event contracts must now assess each contract against the public-interest standard and confirm robust Part 40 certification procedures before listing. Sports event contract operators face heightened scrutiny because the advisory specifically addresses sports-related contracts. Prediction market platforms that are not registered as DCMs and that list contracts with U.S. persons as counterparties remain outside the legal protections afforded by CEA registration and are exposed to enforcement risk. Market participants accessing prediction market contracts through intermediaries should confirm that their brokers have conducted the compliance analysis required under Part 38 Core Principle 3.

The advisory was issued concurrently with the CFTC's ANPRM on prediction markets (Release No. 9194-26), which opens a formal rulemaking process. The advisory does not itself modify the applicable regulatory standards but clarifies the Division's current expectations. A prior Staff Advisory from February 25, 2026 (Release No. 9185-26) had addressed enforcement concerns, and the March 12 advisory supplements that earlier guidance. Open questions persist on how the public-interest analysis applies to newly emerging contract types, including crypto-linked sports prediction markets and geopolitical event contracts.

Prokopiev Law Group advises clients on CFTC prediction market compliance and DCM regulatory obligations, and has a dedicated partner network for U.S. derivatives matters. Contact us to discuss your situation. Our work encompasses CEA Core Principle 3 analysis, Part 40 certification procedures, event contract structuring, sports betting derivatives regulation, prediction market platform compliance, and CFTC enforcement defense.

Source: CFTC Press Release No. 9193-26, "CFTC Staff Issues Prediction Markets Advisory," March 12, 2026. Official URL: https://www.cftc.gov/PressRoom/PressReleases/9193-26. Confirmed March 24, 2026.

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