PTG Responds to CFTC Prediction Markets; Public Interest Determinations: Notice of Proposed Rulemaking
Jul 27, 2026
In a letter filed with the Commodity Futures Trading Commission (CFTC) today, PTG supports the CFTC’s proposed framework for evaluating prediction market event contracts and commends the Commission for adopting a design-first, factor-based approach centered on manipulation resistance, objective settlement criteria, and market integrity. PTG agrees that prediction markets can serve important functions in information aggregation, price discovery, and risk transfer when they are built on transparent governance, reliable settlement processes, fair access to information, and appropriate regulatory oversight. The letter also supports the Commission’s preliminary conclusion that contracts based on aggregate outcomes—such as game results, tournament advancement, and statistical performance—are generally consistent with the public interest because they are less susceptible to manipulation and better support competitive liquidity and efficient pricing.
At the same time, PTG urges the Commission to address several specific risks. Most notably, it argues that “mention” markets—contracts based solely on whether a particular individual says a specified word or phrase—should be deemed contrary to the public interest. PTG contends that these contracts concentrate settlement control in a single person, are vulnerable to undue influence, provide little meaningful information to the market, and often require subjective settlement determinations. The letter also strongly objects to the Proposal’s “trading during review” mechanism, under which contracts could trade for up to 90 days before receiving an adverse public-interest determination that could result in canceled positions and trades. PTG argues that such uncertainty would undermine confidence in the finality of transactions, discourage liquidity provision, and weaken market integrity.
Finally, PTG recommends several enhancements to the final rule. It asks the Commission to promote fair, transparent, and non-discriminatory access to real-time game-state and settlement-relevant data, arguing that unequal access can distort price formation and disadvantage market participants. PTG also renews requests that activity in centrally traded and cleared event contracts not count toward swap dealer de minimis thresholds and that affiliated or internal market makers be subject to strict limitations, transparency requirements, and oversight.