In a new advisory, the Commodity Futures Trading Commission’s Division of Market Oversight called on designated contract markets to comply with the required self-certification procedures for event contract series. The guidance cautions against the growing practice of submitting broad, generic filings that cover multiple unrelated event contracts. According to the DMO, such “boilerplate” submissions make it difficult for regulators to determine whether each individual contract complies with the Commodity Exchange Act and CFTC regulations.The commission noted that lately, companies have been lumping totally different types of bets into a single application. According to the agency, this practice prevents it from properly verifying contract compliance and the accuracy of the submitted data. It cited the 2026 World Cup as an example, noting that all matches from the tournament can be bundled into one submission, but separate tournaments must be filed individually because each is governed by different rules. The advisory is consistent with the CFTC’s broader proposal, issued in June, that provides a formal framework for reviewing event contracts that may be in the public interest. It also comes as prediction markets are under increasing regulatory scrutiny as trading volumes rise and both retail and institutional investors participate.The CFTC had earlier encouraged collaboration with sports companiesIn March, the CFTC laid out its very first clear playbook for betting on real-world events like elections and sports. Regulators recommended that platforms coordinate with sports authorities, comply with integrity standards, set up data-sharing systems, and rely exclusively on official league data. The advisory noted, “DMO staff notes heightened potential for manipulation or price distortion in sports contracts that resolve based on injuries to individual participants, unsportsmanlike conduct, physical altercations, or the actions of a single individual or small group such as officiating decisions.”At the time, Liz Davis, partner at Davis Wright Tremaine and former chief trial attorney in the CFTC Division of Enforcement, also said the commission is pushing for greater cooperation between itself and sports leagues or sporting authorities on sports event contract agreements. She emphasized that the latter should be open to sharing information and using league data.The latest advisory asks contract markets to follow the required self-certification requirements. It argued that if platforms follow proper procedures, they will easily catch people trying to cheat or manipulate scores. Plus, it could make their verification process easier. In the past 18 months, the agency has seen a dramatic rise in self-certified contracts, creating exponentially more versions of the underlying contracts on regulated exchanges. The CFTC suggests a new framework for prediction marketsMeanwhile, the commission on Wednesday introduced draft regulations to strengthen federal oversight of prediction markets and mitigate rising fraud risks. The CFTC’s draft outlines specific standards for sports contracts but excludes political and election-based markets from the most stringent oversight categories. In a statement, Chair Michael Selig asserted that the proposed framework balances strict oversight with market-driven innovation. The agency preliminarily considers both sporting events and games of chance to be forms of gaming. Still, it found that sports wagering is generally not contrary to the public interest, while betting on games of pure luck likely is. In addition, “it refers to the election bets as contests and not as gambling,” implying that such betting activities are not among those specific activities for which the CFTC must conduct a 90-day review of the event contracts.The CFTC’s proposed framework arrives amid intense legal pushback from some US states and Native American tribes seeking to ban sports-focused contracts. Just a few days ago, granted Washington’s motion for a preliminary injunction stopping Kalshi from listing its so-called event contracts in the state. Massachusetts, Michigan, Nevada, and New York have all obtained court rulings that restrict Kalshi’s activities. Although prediction market platforms maintain they proactively self-report bad actors, insider trading incidents have surged. More recently, Gannon Ken Van Dyke, a U.S. Special Forces soldier, allegedly collected more than $400,000 (£296,000) after placing a wager on Venezuelan president Nicolás Maduro’s removal. Authorities also accused an Italian Google software engineer of using insider information to trade. Nonetheless, the CFTC, Kalshi, and Polymarket have affirmed their commitment to combating insider trading as the proposed framework enters a 45-day public comment window. The smartest crypto minds already read our newsletter. Want in? Join them.