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The Commodity Futures Trading Commission (CFTC) delivered the first piece of its promised new guidance on prediction markets on Thursday, and devoted a large chunk of its public notice to highlighting how sports event contracts could be cause for integrity concerns.
In an advisory issued by the CFTC’s Division of Market Oversight (DMO), the commission highlighted that one of the core principles that designated contract markets (DCMs) like Kalshi, Polymarket and Crypto.com must adhere to, Core Principle 3, is only listing contracts that “are not readily susceptible to manipulation.”
In particular, the federal derivatives regulator stressed that certain sports markets must be considered carefully as the explosion of sports event contracts continues across the U.S.
“As front-line regulators, DCMs should be proactive, ensuring proper surveillance and oversight of trading in all of the products that they list, accounting for the particular characteristics and attributes of each product,”..
