CFTC warns prediction market mention contracts face manipulation presumption

The Commodity Futures Trading Commission Division of Market Oversight issued an advisory on September 22, 2026, warning that prediction market "mention" contracts are presumptively susceptible to manipulation. The advisory targets bets on whether a named person says specific words, attends events, or interacts with others. While not a ban, the CFTC requires exchanges to make a heightened showing of surveillance and controls to list these contracts. The guidance follows recent enforcement actions, including a $172,000 settlement with former White House teleprompter operator Gabriel Perez and a $35,000 penalty against former Representative George Santos.

The CFTC Advisory

• ▪The Commodity Futures Trading Commission's September 22, 2026 advisory defines "mention markets" as contracts settling on whether a named person says certain words, attends an event, or interacts with another person
• ▪The Commodity Futures Trading Commission's September 22, 2026 staff advisory, signed by Division of Market Oversight Acting Director Duncan Hennes, carries no legal force and represents staff views rather than the Commission's official position
• ▪The Commodity Futures Trading Commission Division of Market Oversight issued an advisory on September 22, 2026, warning that prediction market "mention" contracts are presumptively readily susceptible to manipulation

Manipulation Risks

• ▪The Commodity Futures Trading Commission staff noted that a podcast host or speaker can easily fulfill a mention contract's condition, and a trader can directly induce the outcome by submitting questions or paying for mentions
• ▪The Commodity Futures Trading Commission staff warned that individuals near a speaker often have advance access to scripts, prepared remarks, or guest lists, which the agency treats as material nonpublic information

Requirements for Exchanges

• ▪To list mention contracts, designated contract markets must make a heightened showing to regulators and implement robust trading rules, surveillance, and controls to rebut the presumption of manipulation
• ▪Exchanges listing mention contracts must assess whether the controlling individual faces legal, professional, contractual, or fiduciary obligations that deter them from gaming the market outcome
• ▪The Commodity Futures Trading Commission staff suggested exchanges implement restricted participant lists, third-party screening, pop-up warnings, and position limits sized to make manipulation economically irrational relative to its cost

Gabriel Perez Case

• ▪In August 2026, the Commodity Futures Trading Commission settled charges against former White House teleprompter operator Gabriel Perez for trading presidential mention markets on Kalshi using advance access to speeches
• ▪Gabriel Perez made over $107,500 in profits and was ordered to pay $172,000, which included a $65,000 civil penalty, and received a three-year trading ban

George Santos Case

• ▪The prediction market platform Kalshi issued a lifetime trading ban against former Representative George Santos following accusations that he wagered money on his own State of the Union speech appearance
• ▪In July 2026, the Commodity Futures Trading Commission ordered former Representative George Santos to pay $35,000 for trading a contract on his own 2026 State of the Union attendance

Debatable claims

• ▪Regulators should ban prediction market 'mention' contracts entirely
• ▪The CFTC should have exclusive authority to regulate prediction markets