The US federal agency that regulates prediction markets. CFTC-regulated platforms offer legal event contracts in all 50 states.
The Commodity Futures Trading Commission (CFTC) is the federal agency that regulates derivatives markets in the US, including prediction market exchanges. CFTC-regulated designated contract markets (DCMs) like Kalshi and ForecastEx offer event contracts that are legal in all 50 states.
CFTC regulation provides: segregated customer accounts, standardized 1099 tax reporting, position limits, and market surveillance. This is a higher regulatory standard than state gaming commissions.
The CFTC's classification of event contracts as financial instruments (not gambling) is what enables prediction markets to operate nationwide regardless of state gambling laws.
A contract that pays $1 if an event occurs and $0 if it doesn't. The price reflects the market's implied probability.
Prediction MarketAn exchange where participants trade contracts based on the outcome of future events, with prices reflecting collective probability estimates.
DCM (Designated Contract Market)A CFTC-regulated exchange authorized to list and trade event contracts. Kalshi, ForecastEx, and CME Group are DCMs.