CFTC Preparing Crackdown on Prediction-Market Promos

The CFTC is preparing to launch an investigation into incentive programs offered by prediction-market platforms, concerned about misleading promotions to attract traders. The regulator is examining platforms with incentive programs that promise specific payouts for certain trades, as well as "risk-free" trades and payouts guaranteeing profits.

CFTC Chairman Michael Selig has not yet decided on his approach, but an action is expected by the end of the week. The agency has been frustrated with companies' failure to comply with their obligations under the Commodity Exchange Act following an August advisory. The CFTC aims to protect market integrity, and the anticipated action comes amid pressure from politicians on both sides of the aisle.