The U.S. Commodity Futures Trading Commission (CFTC) has issued new guidance highlighting concerns about a growing category of prediction market contracts that depend on the actions or statements of specific individuals. The agency’s Division of Market Oversight (DMO) advised designated contract markets (DCMs) that so-called “mention markets” may face greater susceptibility to manipulation and should undergo heightened scrutiny before being listed.
Mention markets typically allow traders to speculate on whether a public figure will use a specific word or phrase during a speech, earnings call, broadcast appearance, or similar event. The latest advisory also covers related event contracts tied to a person’s attendance at an event or interaction with another individual.
According to the CFTC, these contracts differ from many traditional event-based prediction markets because their outcomes can depend on the conduct of a single person or a small group of individuals. In its advisory, the DMO stated: “DCMs should consider whether certain categories of event contracts, such as Mention Markets, have a heightened potential for manipulation.”
The regulator emphasized that the guidance does not introduce new legal obligations and does not prohibit exchanges from offering such contracts. Instead, it outlines how the agency expects exchanges to evaluate and address potential risks under the Commodity Exchange Act.
Regulator Focuses on Manipulation Risks
The CFTC’s concerns center on the possibility that people with influence over, or knowledge of, the event outcome may be able to affect settlement conditions for personal gain.
“Because the outcome of these contracts is often within the control of a small number of actors, the settlement condition is comparatively easier to cause, prevent, or influence for personal gain,” the advisory stated according to CNBC.
The agency further warned: “In certain circumstances where the costs of manipulation or the likelihood of detection is low and sufficient safeguards are absent, the person whose conduct determines settlement (or those in close proximity of such person) may readily influence the outcome of the contract, exploit advance knowledge of it, or both.”
Federal regulators have increasingly examined these markets as prediction platforms expand. The CFTC noted that outcomes based on individual actions may lack the independent generation and external verification that characterize many other event contracts, such as those tied to election results, Federal Reserve decisions, or aggregate sports outcomes.
The issue gained attention following several high-profile incidents. In August, a teleprompter operator who worked on President Donald Trump’s speeches settled with the CFTC after trading on contracts related to words the president would use in public remarks. Gabriel Perez was ordered to pay a $172,539 penalty for insider trading involving prediction market contracts.
Mention markets have also attracted criticism from other industry participants. Last year, Coinbase CEO Brian Andrews concluded an earnings call by reading a list of words that traders could wager on him saying through Kalshi’s markets.
The CFTC’s latest advisory arrives after reports that the agency had been reviewing mention market products. Kalshi, one of the few CFTC-regulated platforms offering these contracts, reportedly removed sports-related mention markets during that review process. Kalshi spokesperson Elisabeth Diana said: “We’ve addressed this guidance based on a prior discussion with the CFTC.”
Four Areas Exchanges Must Address
Rather than banning the contracts, the DMO outlined four key considerations it expects exchanges to evaluate when proposing mention market products.
The first involves whether the person whose actions determine the outcome is constrained by legal, professional, fiduciary, or reputational obligations that could discourage manipulation.
The second concerns the possibility of outside parties influencing the outcome indirectly. Regulators cited scenarios where individuals could attempt to shape results by pressuring or prompting the person at the center of a contract.
A third factor focuses on whether the relevant conduct can be independently verified and subjected to public scrutiny. The agency indicated that actions occurring in private settings or involving non-public individuals may present additional challenges.
Finally, the CFTC expects exchanges to implement surveillance systems, trading controls, and monitoring measures capable of detecting manipulation attempts and misuse of nonpublic information.
The advisory stated that exchanges seeking to list these products should provide “a thorough evaluation” of those factors and maintain controls “reasonably designed to detect and deter manipulation, attempted manipulation, and the misappropriation of nonpublic information in connection with the listed contracts.”
Broader Implications for Prediction Markets
Industry observers have drawn parallels between the CFTC’s concerns and longstanding debates surrounding microbetting in sports wagering. Microbetting markets focus on highly specific in-game events, such as the outcome of a single pitch in baseball or the next play in a football game. Critics have argued that these markets may be vulnerable because a small number of people can influence the result or possess privileged information.
The DMO’s advisory echoed similar themes, stating: “As the settlement of contracts in Mention Markets may be controlled by a single individual, a small group of individuals, or persons with access to or influence over the individual whose words, attendance, or interaction determines settlement, (Division of Market Oversight) staff may view Mention Markets as presumptively readily susceptible to manipulation and accordingly expect a heightened showing in support of any submission seeking to list such contracts.”
The regulator also encouraged exchanges to engage with DMO staff during the early stages of contract development to identify and mitigate manipulation risks before bringing products to market.
The guidance arrives as the prediction market sector continues to grow. Since January 2025, the CFTC has approved 12 new designated contract markets, while more than 1,600 event contracts were listed on U.S. prediction platforms by 2025. The sector has also attracted increasing attention from lawmakers, with more than 10 bills targeting prediction markets introduced since the beginning of 2026.
At the same time, the CFTC has begun building a track record of enforcement in the space. Alongside the teleprompter operator case, the agency previously pursued an enforcement action involving former Congressman George Santos, who was accused of trading an event contract linked to his own attendance at the 2026 State of the Union address.