The question of who regulates prediction markets does not have one answer. It has two, and they sit in different legal universes. In the United States, a federal commodities regulator oversees the venues as derivatives exchanges, while state gambling laws keep trying to pull them into a different lane. In the United Kingdom, the regulator responsible for betting has said that current products would appear to fall within the definition of a betting intermediary, and that unlicensed operators should not be targeting consumers here.
So this is a hub, not a deep dive. It names the regulators, points to the rules they actually cite, and links out to the country-specific explainers for anyone who wants the full picture. The aim is to answer one question cleanly: when someone opens a prediction market in New Jersey, or from a browser in Manchester, who is in charge?
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The short version
Two regulators, two frameworks, one messy overlap. In the United States, the Commodity Futures Trading Commission (CFTC) regulates prediction market venues as designated contract markets under the Commodity Exchange Act. In the United Kingdom, the Gambling Commission has said that current prediction-market products appear to fall within the UK definition of a betting intermediary, and would need a licence to operate here.
That is the structural answer. The practical answer is more fractured, because US states have their own gambling laws and three federal appeals courts have now ruled on whether those state laws can reach a CFTC-registered exchange. For the longer treatment, see our guide to whether prediction markets are legal in the US and the companion piece on the UK legal position.
Who regulates prediction markets in the US
Start with the exchange, not the user. The CFTC designated KalshiEX LLC as a designated contract market on 4 November 2020, under Section 5 of the Commodity Exchange Act and CFTC Regulation 38.3(a), according to the CFTC's announcement. Designated contract markets, in the CFTC's own description, are the exchanges most like traditional futures exchanges, open to all types of traders including retail customers, per the agency's DCM overview page.
That framing matters. A CFTC-registered exchange is regulated as a derivatives venue, not as a bookmaker. The contracts it lists are event contracts, a category we unpack in our explainer on what an event contract is.
There is a federal brake built into the statute. Under 7 U.S.C. § 7a-2, the CFTC can determine that an event contract is contrary to the public interest if it involves gaming or similar activity. CFTC Rule 40.11 goes further and says a registered exchange shall not list a contract that involves, relates to or references gaming, per the rule text at eCFR §40.11. So even inside the federal perimeter, there is a line the agency can draw.
Where the states come in
And then there are fifty other regulators. States apply their own gambling laws, and whether those laws reach a CFTC-registered exchange is now a live federal question, and the federal appeals courts are split.
On 6 April 2026, the Third Circuit upheld an injunction protecting Kalshi against New Jersey, per the court's opinion. On 28 August 2026, the Ninth Circuit, at the preliminary-injunction stage, held that Kalshi had not shown its sports event contracts were likely swaps, per its opinion. On 25 September 2026, the Sixth Circuit also ruled against Kalshi in cases involving Ohio and Tennessee, per the opinion.
New Jersey asked the US Supreme Court on 2 September 2026 to review the Third Circuit decision. As of 15 October 2026, the Court had not said whether it will hear it. On 30 October 2026 the Court extended Kalshi's deadline to respond to the petition to 7 December 2026, according to the Court's docket for No. 26-299. We walk through that petition in more detail in our piece on New Jersey's Supreme Court filing.
Who regulates prediction markets in the UK
One regulator, one Act, one clear statement. The Gambling Commission regulates betting under the Gambling Act 2005. Section 9 of the Act defines betting as making or accepting a bet on the outcome of a race, competition or other event or process, the likelihood of anything occurring or not occurring, or whether anything is or is not true, per the statutory text. Section 13 defines a betting intermediary as a person who provides a service designed to facilitate the making or acceptance of bets between others, per its text.
So where does that leave a prediction market? The Commission addressed the question directly on 4 February 2026. In a post on its website, it wrote that "current products would fall within the definition of a 'Betting Intermediary' under UK legislation" and that "current prediction market operators who are not licensed in Great Britain should take steps to ensure they are not targeting or transacting with consumers in Great Britain," per the Commission's blog post. We cover that statement in detail in our piece on the Gambling Commission's view on prediction markets.
That is the headline. The practical consequence is that an operator wanting to serve British consumers would need a licence from the Commission, and the Commission said there are criminal offences associated with operating without one.
Why spread betting sits in a different box
There is a carve-out in the Gambling Act that trips up a lot of readers. Section 10 excludes from the Act a bet whose making or accepting is a regulated activity under section 22 of the Financial Services and Markets Act 2000, per the Act's text. That is why spread betting in the UK is regulated by the Financial Conduct Authority, not the Gambling Commission, as the Commission itself notes in its February 2026 post.
That split matters because it shows the UK framework can send a betting-shaped product into financial regulation when the statute says so. The Commission's point is that current prediction-market products do not sit in that FCA lane; they sit in the betting lane the Commission regulates.
It is also worth flagging a separate FCA move that touches the broader binary-outcome product space. The FCA permanently banned the sale, marketing and distribution of binary options to retail consumers from 2 April 2019, per its policy statement. That is not a rule about prediction markets specifically, but it shapes the regulatory backdrop against which they arrive.
What this means for the reader
Two frameworks, two different starting assumptions. In the United States, the default position is that a CFTC-designated contract market can offer event contracts to retail traders, subject to the public-interest line in the statute and the ongoing state-federal fight working its way through the appeals courts. In the United Kingdom, the default position is that current prediction-market products look like betting intermediaries, and the operator would need a Gambling Commission licence to serve British consumers.
If you want the deeper walk-through, our country pages do the work. The US guide covers the CFTC perimeter and the state-level fight. The UK guide walks through the Gambling Act framework and what the Commission's February post means in practice.
This article explains the law as it stood on 3 November 2026. It is for information only and is not legal advice.
Frequently asked questions
Who regulates prediction markets in the United States?
The Commodity Futures Trading Commission regulates prediction market venues at the federal level as designated contract markets. The CFTC designated KalshiEX LLC as a DCM on 4 November 2020 under Section 5 of the Commodity Exchange Act and CFTC Regulation 38.3(a). The agency describes DCMs as exchanges most like traditional futures exchanges, open to retail customers. However, states apply their own gambling laws, and three federal appeals courts have now ruled on whether those state laws can reach CFTC-registered exchanges, with different outcomes in the Third, Sixth and Ninth Circuits during 2026.
Who regulates prediction markets in the United Kingdom?
The Gambling Commission regulates betting in the UK under the Gambling Act 2005, and it has said current prediction-market products appear to fall within the definition of a betting intermediary under UK legislation. The Commission posted this view on 4 February 2026 and said current prediction market operators who are not licensed in Great Britain should take steps to ensure they are not targeting or transacting with consumers in Great Britain. The Commission also noted there are criminal offences associated with operating without an appropriate licence.
Why is spread betting regulated differently in the UK?
Section 10 of the Gambling Act 2005 excludes from the Act any bet whose making or accepting is a regulated activity under section 22 of the Financial Services and Markets Act 2000. That exclusion is the reason spread betting sits with the Financial Conduct Authority rather than the Gambling Commission. The Commission highlighted the point in its February 2026 post, drawing the distinction between products that are regulated as financial services and products that are regulated as betting. Current prediction-market products, in the Commission's view, sit in the betting lane rather than the FCA lane.
Can the CFTC stop a US exchange listing a prediction market contract?
Yes, under limited conditions set out in the statute. Under 7 U.S.C. § 7a-2, the CFTC can determine that an event contract is contrary to the public interest if it involves gaming or similar activity. CFTC Rule 40.11, found at eCFR §40.11, states that a registered exchange shall not list a contract that involves, relates to or references gaming. Those provisions are the federal brake inside the DCM framework. They sit alongside the separate question, now before the appeals courts, of whether individual state gambling laws can reach contracts listed on a CFTC-registered exchange.
Is the US Supreme Court going to decide the Kalshi state-law question?
New Jersey filed a petition on 2 September 2026 asking the Supreme Court to review the Third Circuit's 6 April 2026 decision upholding an injunction for Kalshi. As of 15 October 2026, the Court had not said whether it will hear the case. The underlying circuit split is real: the Third Circuit ruled for Kalshi, while the Sixth Circuit, on 25 September 2026, and the Ninth Circuit, on 28 August 2026, ruled against the exchange.