CFTC Tightens Standards for ‘Mention Market’ Bets, Warning of Manipulation Risks

The US Commodity Futures Trading Commission has tightened the standards for allowing betting products that predict whether public figures will use specific words in speeches or press conferences, warning that the contracts are vulnerable to manipulation.

Bloomberg reported on September 22 that the CFTC issued new guidance on so-called “mention markets,” which allow traders to bet on whether politicians, athletes and corporate executives will use particular words or phrases in public appearances.

The CFTC said the contracts carry a greater risk of manipulation than other prediction-market products because their outcomes depend on the remarks of a specific individual. People with access to speech drafts, prepared remarks or nonpublic materials could gain an unfair trading advantage.

The agency also said outsiders could use financial incentives or social pressure to induce a speaker to use a particular expression.

The CFTC previously investigated a White House teleprompter operator accused of learning the contents of US President Donald Trump’s speech in advance and making more than $100,000 on prediction-market platform Kalshi. The individual agreed in August to pay more than $172,000 to settle the matter without admitting wrongdoing, ending the investigation.

Similar concerns have emerged in sports. The National Football League asked the CFTC in July to ban bets on whether specific words would be mentioned during broadcasts, saying a single person could manipulate the outcome. Major League Baseball also called for tighter regulation of bets tied to press conferences and postgame interviews.

The CFTC said such products can be allowed only in limited circumstances where safeguards against manipulation are in place. Exchanges should consider whether the speaker is subject to legal or professional duties that deter efforts to influence outcomes, and they should maintain their own rules and surveillance systems to detect and prevent unfair trading.

The guidance does not carry the same legal force as a formal regulation. The CFTC in June also proposed rules that would restrict prediction-market betting tied to war and terrorism.

A broader regulatory conflict between federal and state authorities over prediction markets is also continuing. While the CFTC and prediction-market platforms argue that event contracts are financial derivatives distinct from conventional gambling, some states have filed lawsuits alleging the platforms are operating illegal gambling businesses.

Kalshi and Polymarket said they oppose insider trading, monitor their markets and pass suspicious trading information to law enforcement and federal regulators.