Clear federal rules. Strong market integrity. Real consumer protection.
A framework for responsible prediction markets
Clear federal rules. Strong market integrity. Real consumer protection. A predictable environment for responsible innovation. Here is what good policy looks like.
Five principles should guide prediction market policy. They are the framework Americans for Fair Markets supports and the standard we use to evaluate legislation at every level.
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Clear and Consistent Oversight
A single federal standard applied uniformly across jurisdictions, so platforms and users know what the rules are and regulators can enforce them.
Strong Market Integrity
Objective settlement rules, continuous surveillance, and industry-wide insider trading and anti-manipulation standards modeled on the ones governing NYSE and Nasdaq.
Consumer Access and Transparency
Users should understand how markets operate, how contracts settle, and what protections apply to them.
Regulatory Clarity
Prediction markets should be clearly distinguished from gambling and other unrelated activities in law and in practice.
Responsible Innovation
Predictable, pro-growth rules that encourage competition and investment without compromising on integrity.
Why federal,
not state
The Problem of Fragmentation
Voters instinctively reach for state regulation because that is the model they know from casino gambling. Prediction markets are different. They are national-scale financial exchanges connected to real-time information about elections, economic data, weather, and geopolitics. A 50-state patchwork would be unworkable for exchanges, confusing for users, and a gift to offshore operators who would be happy to fill the vacuum.
The Federal Commodity Standard
The CFTC has supervised complex derivatives markets for decades. It has the staff, the experience, and the enforcement tools. A single federal cop on the beat is the right answer â and it is also the answer that protects state gaming revenues from the displacement a chaotic patchwork would create.
What Congress should do
Three priorities should drive federal legislative and oversight action.
Resource the regulator
Set the integrity standard
Protect consumers
Fund the CFTC to keep pace with innovation, with industry helping shoulder the cost through user fees or assessments.
Enforce NYSE- and Nasdaq-style insider trading and anti-manipulation rules across the prediction market industry.
Enforce strong guardrails including KYC, anti-fraud controls, age limits, transparency requirements, and limits on loss-accelerating product features.
MARKET PROJECTIONS & IMPACT
What the data says
Public opinion on this is less contested than the headlines suggest. Recent research shows that a majority of voters distinguish between financial markets and gambling, prefer federal to state oversight of prediction and investment markets, and reject the idea that adults should be blocked from participating.
50%
GEN-Z & MILLENNIAL ADOPTION
Nearly half of Americans under 45 have already used a prediction market.
$33B
PROJECTED MARKET SIZE
The industry is growing â the U.S. predictive analytics market is projected to reach roughly $33 billion by 2030 â and so is the public appetite for the information these markets produce.