The CFTC gave prediction market participants something to read over the weekend: a 267-page proposed framework for how event contracts should be regulated.
The document covers a lot of ground. So does the market itself — more than half of global prediction market volume currently runs through offshore platforms operating outside any formal regulatory framework.
Here's what happened this week
The CFTC Publishes Its Rulebook
On June 10, the CFTC released its long-awaited proposal for regulating prediction markets, publishing a 267-page framework that would formally define how federally regulated event contract platforms should operate.
.@CFTC Seeks Public Comment on Notice of Proposed Rulemaking Concerning Event Contracts Involving Enumerated Activities: https://t.co/bZk2SVkWuR
— CFTC (@CFTC) June 10, 2026
The proposal would amend Regulation 40.11 and introduce new criteria for evaluating contracts tied to terrorism, war, assassination, gambling, and illegal activity. Exchanges, brokers, trading firms, and industry groups have 90 days to comment on the framework.
Rather than imposing a blanket ban, the framework establishes a process for reviewing markets on a case-by-case basis under a public-interest standard.
The framework shifts the debate from enforcement and litigation to formal rulemaking. At the same time, its scope remains largely focused on federally regulated platforms such as Kalshi. Offshore venues and decentralized prediction markets, where a substantial share of activity takes place, would remain largely outside its reach.
Prediction Markets Move Into Prop Trading
Prediction markets are expanding beyond brokers and exchanges into the proprietary trading industry. Trade Tech Solutions integrated event contracts into the Match-Trader platform, allowing prop firms to offer prediction markets directly inside their existing trading infrastructure.
The contracts are structured as binary YES/NO markets and settle automatically once an outcome is confirmed. Rather than operating as a standalone product, they sit alongside the evaluation programs, challenge accounts, and payout systems already used by prop firms.
The launch follows a broader trend of technology providers adding prediction markets to their product stacks. Event contracts are now reaching traders through prop firms, not just through brokers and dedicated prediction market platforms.
- The CFTC’s New Rulebook Doesn’t Reach a $34 Billion Offshore Prediction Market
- BitMart US Enters Prediction Markets Through Plaee in CFTC-Regulated Push
- How Traders Are Using Prediction Markets to Track Market Risk in Real Time
Kalshi Wants to Catch Insiders Before They Trade
Kalshi is introducing a new screening process designed to identify potential insiders before they are allowed to trade certain contracts. Under the policy, users seeking access to markets considered vulnerable to insider information may be required to disclose their employer and other background information.
The exchange says it will use a risk-scoring system to determine which contracts require additional checks. The company cited markets tied to corporate events as an example, where employees or other insiders could have access to information unavailable to the broader market.
The move reflects a broader shift in how prediction market operators approach market integrity. Rather than focusing only on suspicious trades after they occur, Kalshi is attempting to identify potential conflicts before orders ever reach the market.
Number of the Week
$34 billion is an estimated annual prediction market volume generated by U.S. users on offshore platforms that are not supposed to serve the country, according to a new report by consulting firm Crane Zeng.
The report estimates that Polymarket alone accounts for between $11 billion and $27 billion of that activity. The findings highlight the scale of demand that continues to exist outside regulated U.S. prediction market venues.
Quote of the Week
The CFTC’s newly released framework immediately drew criticism from lawmakers who argue the agency has become too accommodating toward prediction market operators.
Too slow, too meager & too dangerous. The CFTC is showing once again that it’s nothing more than a tool of Kalshi & Polymarket, encouraging addictive gambling, fraudulent bets & national security risks rather protecting consumers & public safety. https://t.co/s3NkXUntV9
— Richard Blumenthal (@SenBlumenthal) June 10, 2026
Bottom Line
The CFTC wants to regulate prediction markets. Kalshi wants to be regulated, and is already using that status to screen out the wrong kind of participants. U.S. traders, meanwhile, keep routing $34 billion a year through platforms that aren't supposed to serve them at all. Everyone says they want clarity. Not everyone is in a hurry to get it.
