The US Commodity Futures Trading Commission, or CFTC, has issued a new warning about a type of prediction market called a mention market. These markets let people trade contracts based on what a person may say, whether someone may attend an event, or whether two people may interact.
The CFTC says these contracts can carry a heightened risk of manipulation. The main concern is simple. The result of a contract may depend on the direct action of one person or a small group of people.
For example, a contract may ask whether a public figure will say a certain word during a speech. Another may ask whether that person will attend an event. A third may ask whether one person will appear with another person.
In each case, the person linked to the contract may have some control over the final result. That creates a problem that may not exist to the same degree in many other types of prediction markets.
The CFTC Division of Market Oversight issued the advisory on September 22, 2026. The notice does not create a new law or a new legal obligation. Instead, it explains how CFTC staff views these contracts under existing rules and what exchanges should consider before they list them.
What Are Mention Markets?
Mention markets are a type of event contract. They focus on a specific action by a person.
A simple example would be a contract based on whether a politician says the word “tariff” during a speech. Another could ask whether a public figure attends a particular event.
The contract may have two possible outcomes. One outcome could pay if the person says the word. The other could pay if the person does not say it.
At first glance, such a market may look like a simple prediction. But the CFTC says the structure creates a special risk because the person whose action decides the result may have the ability to affect that result.
A person may know what they plan to say. They may also know whether they plan to attend an event. People close to that person may have the same information before the public does.
That can give certain traders an advantage.
The CFTC says the settlement of these contracts may depend on conduct that is not always independent or easy for outsiders to verify. This is one of the main reasons the regulator sees a higher risk of manipulation.
Why the CFTC Sees a Higher Risk
The core issue is control.
Imagine a contract based on whether a person will use one particular word in a speech. If that person knows about the contract and knows traders have money at stake, the person could potentially affect the result.
The same problem could arise with an event attendance contract. If a person controls whether they attend an event, their decision can directly affect the value of the contract.
The CFTC says this makes mention markets different from contracts where the final result comes from a broader event that one person cannot easily control.
The regulator therefore says staff may view mention markets as presumptively readily susceptible to manipulation.
That does not mean every mention market is automatically banned. The CFTC says there can be limited cases where such contracts may meet existing federal requirements.
However, an exchange that wants to list one of these products may need to provide a strong explanation of why the specific contract is not readily susceptible to manipulation.
What Exchanges Must Consider
The CFTC says designated contract markets, or DCMs, must look closely at the design of each mention market.
One important question is whether the person who controls the result has duties that discourage manipulation.
For example, that person may have legal, professional, contractual, fiduciary or confidentiality duties. Such duties could make deliberate interference with a contract result more difficult.
Exchanges must also consider whether someone else could put pressure on the person who controls the outcome.
A trader might try to influence that person through money, social pressure or other forms of inducement. The CFTC says exchanges need to consider this type of risk as well.
Another important factor is independent verification.
If a public event takes place in front of a large audience, there may be clear records of what happened. A speech may have video, audio and media coverage. That can make the result easier to verify.
A private conversation is different. If only a few people know what happened, it may be much harder for an exchange to confirm the result.
The CFTC also expects strong trading controls and market surveillance from exchanges that list these products.
The Role of Insider Information
Another major concern is access to information that the public does not have.
Suppose a person works on a public figure’s speech. That person may see the speech before the event. They may know which words the speaker plans to use.
If a mention market exists around those words, that employee could potentially know the result before most other traders.
This gives the employee information that ordinary market users do not have.
The CFTC has already taken action in a case involving this type of situation.
On August 28, 2026, the agency ordered former White House teleprompter operator Gabriel Perez to pay more than $172,000 through disgorgement and a civil penalty after it found that he used advance access to presidential speeches to trade mention market contracts. The CFTC also imposed a three-year trading ban.
The CFTC said Perez had access to presidential speeches before they were delivered because of his federal government employment. The agency found that he used this information for trades linked to words and phrases that President Donald Trump might use.
The case showed why access to private information can be a major problem for this type of market.
The George Santos Case
The CFTC has also dealt with a separate case involving former US Representative George Santos.
That case involved contracts tied to whether Santos would attend the 2026 State of the Union.
According to the CFTC, Santos traded contracts related to his own attendance while also making public statements about whether he would attend.
That created a direct connection between the trader and the event outcome.
The CFTC said Santos’ statements affected the price of the contracts. The agency later ordered him to pay money and imposed a trading ban.
The case is important because it shows another form of risk. A person does not always need secret information to create a problem. A person may also have the ability to affect the result through their own public actions.
That is one reason the CFTC wants exchanges to consider who can influence an event before a contract is listed.
The Advisory Does Not Ban All Mention Markets
The new CFTC notice does not amount to a complete ban on mention markets.
Instead, it tells exchanges that these contracts face greater scrutiny.
The CFTC says there are limited situations where a mention market may meet the requirements of federal law. Exchanges must provide a contract-specific analysis and explain the steps they will take to reduce the risk of manipulation.
This point is important because the advisory is not a new Commission rule.
It is a statement from CFTC staff about how existing requirements should apply to these products. The agency says exchanges remain responsible for following the Commodity Exchange Act and existing CFTC rules.
One key requirement comes from Core Principle 3. It requires designated contract markets to list only derivatives that are not readily susceptible to manipulation.
Stronger Controls May Become Necessary
The new guidance could make it harder for prediction exchanges to list certain mention markets.
An exchange may need to show how it will identify people who have a direct connection to the contract.
It may also need rules that stop those people from trading contracts that they can influence.
For example, an exchange could keep a restricted list of people who have a close connection to a market. It could also prevent certain public officials or people close to them from trading contracts tied to their own actions.
Surveillance will also have an important role.
Exchanges need systems that can detect unusual trades, suspicious price moves and other signs of possible manipulation. They may also need to review public statements and other information when a trader has a direct connection to the event.
The CFTC says these controls should be designed before a contract reaches the market, rather than only after a problem appears.
Why This Matters for Prediction Markets
Prediction markets have grown rapidly in the United States.
These platforms allow users to trade contracts tied to real-world events. The topics can include politics, economics, sports and other public events.
As these markets grow, regulators face questions about how to protect users while allowing new financial products to develop.
The CFTC has already issued other guidance on prediction markets during 2026.
In February, the agency’s Enforcement Division issued an advisory after cases that involved misuse of nonpublic information and other prohibited trading activity on prediction markets. The agency said its authority includes illegal trading practices on designated contract markets.
The new mention-market advisory adds another layer to that oversight.
What It Means for Platforms
For prediction-market platforms, the message from the CFTC is clear: contract design matters.
A platform cannot simply create a market around a person’s speech or actions and assume that normal market rules are enough.
It may need to examine who can influence the result, who may know the result early, how the outcome will be verified and whether traders can put pressure on the person involved.
The platform must also show that its surveillance and trading controls can deal with those risks.
This could affect the number and type of mention markets that appear on regulated US exchanges.
Some products may continue to exist if exchanges can show that they have enough safeguards. Other products may face greater difficulty if one person has too much control over the outcome.
What Comes Next
The CFTC advisory comes at a time when prediction markets are still developing in the United States.
The agency has made it clear that it wants designated contract markets to take responsibility for market integrity. At the same time, it has not closed the door on mention markets.
The next step will likely depend on how exchanges design and submit these contracts.
For each product, exchanges will need to look at the specific facts. A public speech with clear records may present different risks from a private meeting. A contract tied to a large public event may also have different safeguards from one controlled by a single person.
The CFTC’s guidance leaves room for these differences.
A New Test for Prediction Markets
The latest advisory puts a stronger focus on one simple question: Who controls the outcome?
If one person can decide whether a contract wins or loses, the risk can be much higher.
That risk can grow further if the person has private information, if others can pressure them, or if outsiders cannot independently verify what happened.
The CFTC wants exchanges to address these issues before they list such products.
For users, the change could mean fewer contracts based on highly personal actions or stronger restrictions around markets that remain available.
For exchanges, it could mean more research, stronger surveillance and more detailed explanations before a product reaches traders.
The CFTC has not said that every mention market must disappear. Instead, its September 22 advisory says these contracts deserve special attention because their outcomes can depend on the actions of a person or a small group.
As prediction markets continue to grow, that distinction may become increasingly important. The regulator’s latest guidance shows that faster growth will also bring closer attention to how these markets work, how information reaches traders and whether any person can directly affect a contract’s final result.
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