REGULATION September 23, 2026

CFTC Warns “Mention Markets” Face Manipulation Risk as Kalshi Fights Multiply

US regulator flags contracts tied to what public figures say or do, as NCPG calls prediction markets "functionally gambling" amid Kalshi's spreading legal battles.

Marie Toussaint Senior reporter covering gambling regulation, provincial policy and the business of iGaming in Canada. Articles are produced with AI assistance and edited by the ON360 newsroom. · 3 min read

AI-assisted

This article was produced with AI assistance and edited by the ON360 newsroom.

The Commodity Futures Trading Commission has warned prediction market exchanges that a fast-growing category of contracts tied to what public figures say or do carries heightened manipulation risk. In a staff advisory issued Tuesday, the agency’s Division of Market Oversight said these so-called “mention markets” can sometimes be swayed by a single person or a small group.

The category covers wagers on whether someone will use a particular word, appear at an event or interact with another person. Unlike contracts on election results or sports outcomes, the CFTC said, mention markets settle on “the discrete conduct of a named person,” conduct that may be “neither independently generated nor externally verifiable.”

No ban, but a higher bar

Staff said such contracts may be considered “presumptively readily susceptible to manipulation,” which could mean tougher scrutiny before exchanges can list them. The advisory stops short of prohibiting mention markets outright.

Instead, it urges platforms to consult the regulator early in the design process to identify manipulation risks and controls. The guidance follows a recent enforcement case against a former White House teleprompter operator, Gabriel Perez, who was ordered to disgorge $107,539.02 in profits, pay a $65,000 penalty and accept a three-year trading ban over 39 of 43 profitable trades on Trump Mention contracts.

NCPG calls the sector “functionally gambling”

The National Council on Problem Gambling has separately warned that prediction markets pose real consumer risk despite their legal grey zone. NCPG Board President Derek Longmeier said the organization remains neutral on whether the products should be legal but views them as “functionally gambling,” regardless of classification.

“The harm is not theoretical, and we cannot wait to act,” Longmeier said. The comment lands as NCPG’s own funding ties to the prediction market sector face renewed scrutiny from several US gaming regulators.

Kalshi’s court fights keep multiplying

Kalshi’s legal exposure continues to widen on multiple fronts. The operator has asked the Seventh Circuit for permission to appeal a Wisconsin ruling that let the Ho-Chunk Nation pursue Indian Gaming Regulatory Act claims against the company, after the district court rejected Kalshi’s argument that federal commodities and internet-gambling law preempted tribal authority.

In Tennessee, state lawyers have submitted a Ninth Circuit ruling favouring two California tribes as supplemental authority in their own Sixth Circuit case against Kalshi. Separately, the Mexican Football Federation has sued Kalshi in New York federal court, alleging improper use of the Liga MX trademark and club names despite cease-and-desist demands; Kalshi says its use was limited to “plain-text identification” in regulated markets.

Also in Washington, Utah Senator John Curtis has asked the Senate Judiciary Committee to investigate business dealings involving the presidential family, including Donald Trump Jr.’s advisory roles and investments at Kalshi and Polymarket. Curtis, who has introduced legislation to limit prediction markets, cited what he called “significant financial and advisory ties” that depend on CFTC decisions.

Why it matters north of the border

Ontario’s regulated iGaming market operates under AGCO and iGaming Ontario oversight, separate from the US prediction-market fight, but the sector’s legal uncertainty in the United States is being watched closely by Canadian operators weighing product design and cross-border compliance. Regulated Ontario sportsbooks continue to offer deposit limits and self-exclusion tools for players who want them.