CFTC prediction markets are facing increased regulatory scrutiny as the U.S. Commodity Futures Trading Commission reviews so-called “mention markets” offered by prediction platforms, according to people familiar with the matter.
Mention markets allow traders to speculate on whether specific words or phrases will be used during events such as political speeches, corporate earnings calls, television broadcasts and other public appearances.
The review adds to growing regulatory pressure on the prediction-market industry, which has expanded rapidly while facing increasing questions about market manipulation, gambling laws and the regulatory authority of federal and state agencies.
CFTC prediction markets review targets mention contracts
People familiar with the matter said the CFTC notified prediction-market operator Kalshi about its review several weeks ago.
Around the same period, Kalshi removed sports-related mention markets from its platform, according to one person familiar with the situation. It is not yet clear whether the CFTC’s review covers only sports-related mention contracts or all mention markets regardless of their subject.
The CFTC and Kalshi declined to comment.
NPR was the first to report the agency’s inquiry into mention markets late Thursday.
Prediction markets face manipulation concerns
Mention markets have become among the most closely scrutinised products offered by prediction platforms. Critics argue that these contracts could be particularly vulnerable to manipulation because a single individual may be able to influence whether a particular word or phrase is used.
Despite the attention, mention markets represent only a small portion of overall trading activity on Kalshi. Dune Analytics data showed that the contracts generated approximately $3.3 million in trading volume last month, significantly below the volume recorded by larger markets, including cryptocurrency-related contracts.
The CFTC has already investigated a case involving a former teleprompter operator for President Donald Trump. In July, the agency said the former operator allegedly earned about $90,000 by betting on the content of Trump’s speeches through Kalshi.
Coinbase CEO Brian Armstrong also demonstrated the potential vulnerability of these markets during an earnings call in December. Armstrong deliberately mentioned words including bitcoin, ethereum, blockchain, staking and Web3 at the end of the call to show how easily a prediction-market wager could potentially be influenced.
Supporters of mention contracts argue that statements from influential figures can have a substantial impact on traditional financial markets. They say prediction contracts based on those statements can therefore provide useful predictive information.
Kalshi head of market operations Arjun Sawai defended the products in a letter submitted to the CFTC during a public comment period last month. He argued that mention markets do not create a fundamentally new incentive for manipulation, but instead provide a regulated, transparent and monitored mechanism alongside much larger existing financial incentives.
Kalshi and Polymarket take different approaches
While Kalshi has offered mention contracts in the United States, rival platform Polymarket does not operate mention markets through its CFTC-regulated U.S. exchange.
Polymarket does, however, offer mention markets through its overseas operations.
The latest review comes ahead of an Aug. 20 meeting of the CFTC’s Innovation Advisory Committee. The committee is scheduled to discuss prediction markets alongside artificial intelligence and cryptocurrency, according to its published agenda.
The CFTC has increased its oversight of prediction platforms in recent weeks, even as the agency continues to support event-contract exchanges in their dispute with states over sports-related wagers.
The commission has sued nine states as it seeks to defend what it considers its exclusive authority to regulate event contracts.
Last month, the CFTC invited public comments concerning vertical integration among regulated entities. The agency also warned platforms against submitting broadly worded, self-certified event contracts.
The regulator subsequently sent letters to prediction-market platforms reminding them not to display contract odds using a casino-style format.
State regulators add pressure on prediction markets
The federal scrutiny comes as prediction platforms also face legal challenges from individual states.
A Washington state judge on Thursday issued an order blocking several Kalshi markets from operating in the state. The restricted categories include mention markets, sports, elections and other high-volume contracts.
The judge concluded that Kalshi was likely violating state law by operating as an illegal gambling operation.
Washington is now the fourth state to block Kalshi, joining Michigan, Nevada and Massachusetts.
The legal picture is not uniform across the country. Last month, a federal judge in Minnesota overturned a potential statewide ban on prediction-market platforms.
JPMorgan disputes over Polymarket relationship
Separately, the Financial Times reported Friday that JPMorgan had cut off Polymarket from financial services in October 2025 because of concerns surrounding government regulation.
Polymarket disputed that characterization and told CNBC that it continues to maintain a relationship with JPMorgan.
A spokesperson said Polymarket has an active relationship with the bank across multiple entities and operational integrations, including arrangements involving customer fund flows.
The spokesperson also pointed to Polymarket’s chief executive speaking at three JPMorgan flagship events during the past year as evidence of the strength of the relationship.
The developments highlight the increasingly complicated regulatory environment facing CFTC prediction markets as federal regulators, state authorities and financial institutions continue to examine how these platforms operate.
