SFC Tells the CFTC to Regulate Prediction Markets the Right Way
Sports prediction markets are growing fast and the rules governing them will determine whether fans are protected or left exposed. Today, Sports Fans Coalition filed formal comments with the Commodity Futures Trading Commission in response to the agency's Advance Notice of Proposed Rulemaking on prediction markets. Our message: regulate these products comprehensively, with fans' interests at the center.
Regulate, Don't Prohibit
Some have called on the CFTC to effectively ban sports event contracts by classifying them broadly as "gaming" under the Commodity Exchange Act. We urge a different approach. The CFTC has certified approximately 1,600 event contracts in 2025 alone, up from an average of five per year between 2006 and 2020. Applications for designated contract market registration have more than doubled in the past year. This market has arrived, and prohibition won't eliminate demand, it will push consumers toward unregulated offshore platforms where they have no protections at all.
SFC's position is that "gaming" under the CEA should be construed narrowly, distinguishing between pure games of chance (like slot machines or lotteries, where outcomes are determined entirely by luck) and skill-based sporting events that are publicly observable, independently verified, and based on the performance of real athletes in real competition. Sports event contracts, when traded on properly regulated platforms, can serve legitimate hedging and risk management functions for broadcasters, local businesses, municipalities, and fans themselves.
Integrity Has to Be Built In
A prediction market is only as valuable as the fan’s confidence that the game is fair. Sports event contracts present manipulation risks that differ from traditional commodity derivatives: a single individual may possess material nonpublic information or, in the worst case, the ability to influence the outcome itself.
This is not hypothetical. In November 2025, two Cleveland Guardians pitchers were federally indicted on charges that they accepted bribes to manipulate individual pitches so that co-conspirators could profit from prop bets. Similar charges followed involving NBA players and coaches. These cases arose in traditional sports betting, not prediction markets — and prediction markets' transparency may actually help deter some forms of manipulation. But platforms, leagues, and the Commission must remain vigilant, and integrity protections must be foundational, not afterthoughts.
SFC called on the CFTC to require that platforms listing sports event contracts enter into information-sharing agreements with leagues, governing bodies, or integrity monitoring organizations. Critically, players unions must be included in those frameworks. The CFTC-MLB MOU signed in March 2026 is a promising model, but it should be expanded to cover the players association as well. Leagues may own the game, but the players are the game.
Mandatory Protections, Not Voluntary Suggestions
Responsible trading standards cannot be left to the discretion of individual platforms. The competitive dynamics of this market create a race to the bottom: platforms that impose fewer consumer restrictions may attract more volume, putting pressure on competitors to lower their own standards. Only mandatory Commission-imposed requirements can prevent that outcome.
SFC called on the CFTC to require a baseline set of responsible trading protections:
national self-exclusion programs,
deposit and loss limits,
prohibitions on using credit cards to fund accounts,
robust age verification,
restrictions on push notification marketing, and
mandatory contributions to independently administered problem gambling prevention and treatment programs.
These are standard features of regulated sports betting markets across the country. There is no principled reason prediction markets should be held to a lower standard.
Enforcement Has to Mean Something
Rules without enforcement are just suggestions. The CFTC is already stretched, managing oversight of traditional futures and swaps markets, and prediction markets are growing rapidly in scope and complexity. SFC urged the Commission to communicate its resource needs clearly to Congress and we call for a private right of action for fans.
Fans built the sports industry. The CFTC has a meaningful opportunity to ensure they aren't left behind as prediction markets grow. SFC will continue to engage with the Commission as this rulemaking develops.