How prediction markets are regulated (US)
In the US, event contracts are federally regulated derivatives overseen by the CFTC — not the Wild West.
They're regulated derivatives
In the United States, an event contract is a kind of derivative — a contract whose payout depends on whether a future event happens. The Commodity Futures Trading Commission (CFTC), a federal agency, has stated it holds exclusive jurisdiction over these markets and treats them as regulated products, not gambling.
A short history
Prediction markets have operated in the US since the Iowa Electronic Markets launched in 1988 under a CFTC no-action letter. The CFTC approved the first “designated contract market” offering binary options in 2004, and the 2010 Dodd-Frank Act amended the law to formalize the CFTC's authority over event contracts.
What a “designated contract market” is
A designated contract market (DCM) is a CFTC-regulated exchange. To become one, a venue must pass a stringent application and then ongoing examinations, and follow core principles designed to protect against fraud, manipulation and unfair trading. Kalshi operates as a DCM; Polymarket gained a regulated US venue in 2025 by acquiring a CFTC-registered exchange; and PredictIt came into full CFTC compliance in 2025.
Protect yourself
The CFTC advises trading only with registered entities, using only money you can afford to lose, understanding the fees and the contract's exact wording, and treating promises of big payoffs or celebrity endorsements as red flags. PredictionHub is informational only — no trading and no funds — and links every market back to its source so you can verify who runs it.
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