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The Commodity Futures Trading Commission’s Division of Market Oversight on Thursday March 12 issued a prediction markets advisory regarding the listing for trading of event contracts.
In light of the rapid rise in popularity of prediction markets, the division seeks to encourage growth and innovation in these markets while reminding designated contract markets of their regulatory obligations pursuant to the Commodity Exchange Act and Commission regulations.
The advisory, among other things, underscores DCMs’ regulatory obligations with respect to CEA section 5(d) and Part 38, DCM Core Principle 3 and the Appendix C guidance, and product submission requirements. It also discusses certain nuances that may have particular applicability to sports-related event contracts.
The division believes that, as front-line regulators, DCMs should take proactive steps to ensure their markets continue to evolve in a manner that complies with the CEA and Commission regulations.
Regulatory Writer and Editor for SportRadar, Robert Linnehan, writes:
"The CFTC's published prediction market guidance reminds DCMs they must adhere to DCM Core Principle 3 when self-certifying markets. This principle requires DCM only list markets 'that are not readily susceptible to manipulation.' How does this apply to sports event contracts?"
- Chris Costigan, Gambling911.com Publisher
