The U.S. Commodity Futures Trading Commission issued new guidance cautioning prediction market platforms such as Kalshi and Polymarket over how they handle trading incentive programs, according to the regulator’s latest compliance advisory. The agency says it is seeing an increase in filings that are often procedurally or substantively deficient, limiting its ability to evaluate whether platforms gave adequate notice and assessed program compliance.
What the CFTC’s Latest Incentive-Program Guidance Says
The guidance warns that event-contract venues should file incentive programs properly and avoid structures that could incentivize bad behavior. The warning arrives amid a wider regulatory focus on prediction markets. The CFTC has already pushed to keep Kalshi operating in New York despite a state lawsuit, as covered in CFTC Orders Kalshi to Continue Offering Prediction Markets in New York Despite State Lawsuit.
Why Faulty Filings Raise Market-Abuse Concerns
Deficient notices can hide program terms or weak compliance controls, creating openings for market abuse, according to the regulator. That concern also shows up in the agency’s hard line on derivatives structures, including the ongoing legal fight over onchain perpetual futures detailed in Inside the Legal Clash: CME vs CFTC Over Onchain Crypto Perpetual Futures.
The scrutiny is not limited to federal filings. Kalshi and Polymarket recently pushed back against state-level restrictions, securing a pause from Minnesota’s prediction market ban in a case covered by Kalshi and Polymarket Secure Pause Against Minnesota’s Prediction Market Ban.
For prediction market operators, the guidance suggests that compliance with incentive-program filing standards will remain a front-line requirement as the CFTC continues to examine event-contract venues.
