CFTC Proposed Rules on Prediction Markets are a Step But Fall Far Short of What Consumers Need

Philanthropist John Arnold via X:  ​“The CFTC’s proposed rules should have preceded the approval of sports betting on prediction markets, but better late than never. There is genuine progress here: banning next-play and discrete-action prop bets is the right call: these serve no public interest, and the rapidity of betting makes them among the most dangerous products on the market. But the CFTC ties itself in knots explaining how sports betting on prediction markets meets the standard for commodity markets — bets on the number of points a player scores is gambling. If a state wants to legalize it, that is the state’s decision to make, but it is not a commodity market under the CFTC, and these rules do not change that.” 

Washington, D.C. (June 11, 2026) – Arnold Ventures today responded to the Commodity Futures Trading Commission’s release of proposed rules governing prediction markets, acknowledging meaningful progress on specific contract categories while warning the rules do not resolve the fundamental problem: sports prediction markets are sports gambling, and sports gambling should be regulated by the states. 

The proposed rules take meaningful steps that Arnold Ventures supports, including identifying discrete-action prop contracts like bets on individual pitches, plays, shots – or whether a referee makes a specific call – as contrary to the public interest. These contracts serve no price-discovery function, create direct financial incentives for athletes and officials to manipulate outcomes, and are among the highest-risk products driving problem gambling and sports integrity violations. By also finding that contracts based on pure luck fail the public interest test, including casino-style and iGaming products, the CFTC draws a meaningful line that state leaders should take note of as well. 

But the rules fall critically short. Prediction markets remain accessible to users as young as 18, and the proposed rules include no age verification standards or restrictions on inducements targeting young adults, which some leading states have chosen to employ. The rules also leave intact the contracts that dominate actual platform usage, including bets on final scores, point differentials, and individual player statistical performance, which the CFTC itself struggles to distinguish from ordinary sports bets. 

Most fundamentally, the rules leave state consumer protection authority entirely preempted. More than 40 state attorneys general, Republican and Democratic, have gone to court arguing that their age verification requirements, deposit limits, self-exclusion registries, and problem gambling protections should apply to prediction market users. ​“These rules leave those states without recourse, and leave their residents without the protections every other sports betting product is required to provide,” said Kelli Rhee, President and CEO of Arnold Ventures. 

Arnold Ventures supports bipartisan efforts in Congress to close the prediction market loophole. The Prediction Markets Are Gambling Act, sponsored by Senators John Curtis (R‑UT) and Adam Schiff (D‑CA), would make clear that event contracts tied to sporting events or casino-style games should be regulated under state gambling frameworks. 

Arnold Ventures is also encouraged to see swift bipartisan action on this issue in both chambers, and applauds the efforts of Representatives Blake Moore (R‑UT) and Salud Carbajal (D‑CA), who sponsored the Event Contract Enforcement Act, which aims to strengthen existing law to empower the CFTC to prohibit the listing of certain prediction markets, including sports gaming. 

Arnold Ventures continues to stand alongside a growing coalition of governors, attorneys general, faith leaders, and advocates who agree that Congress must move swiftly to pass clarifying legislation to ensure sports prediction markets are effectively regulated while safeguarding individual freedom.