Advertising Prediction Markets? The CFTC Just Sent a Clear Message to Affiliates.

By: Kyra Pulliam

The Commodity Futures Trading Commission (CFTC) recently issued guidance directed to designated contract markets (DCMs) concerning the marketing and offering of event contracts. The guidance was addressed to DCMs because no swap execution facilities (SEFs) currently list event contracts. However, the CFTC’s analysis is equally applicable to futures commission merchants (FCMs) and introducing brokers (IBs), as well as the advertising affiliates and marketing partners that help solicit customers for these products.

The CFTC makes one thing clear: the anti-fraud and anti-manipulation provisions of the Commodity Exchange Act apply to the marketing of event contracts.

For affiliates that drive traffic to prediction markets, this guidance is a reminder that compliance is not limited to the operator. Marketing materials matter, and regulators are paying attention.

What prompted the notice?

According to the CFTC, it has received reports of participants using misleading or deceptive promotional practices to solicit customers for event contracts. The agency used the notice to remind market participants that federal law prohibits deceptive conduct in connection with commodities transactions.

Although the notice does not announce a new rule or enforcement initiative, it signals that the CFTC is actively monitoring marketing practices in this space.

What does this mean for affiliates?

If you’re an affiliate promoting prediction markets, the biggest takeaway is straightforward: market honestly.

Many of the same advertising principles that affiliates already follow in regulated sports betting apply here as well. Avoid:

• Exaggerating the likelihood of profits or portraying contracts as “easy money.”
• Making claims that cannot be substantiated.
• Omitting material information that would affect a customer’s understanding of the product.
• Creating a false sense of urgency or certainty about future outcomes.
• Suggesting that contracts are “guaranteed” or “risk-free.”

Even if the operator ultimately approves your marketing materials, affiliates should remember that regulators can evaluate advertising independently.

Don’t forget your Introducing Broker obligations

Many affiliates entering the prediction market space are doing so under an Introducing Broker registration or are affiliated with registered entities.

If that applies to you, your obligations extend beyond truthful advertising. IBs are responsible for supervising promotional materials and ensuring that communications comply with applicable CFTC and NFA requirements. An affiliate marketing campaign that creates unrealistic expectations or misrepresents the product could create regulatory issues for both the affiliate and the registered entity.

Practical steps affiliates should take

This notice is a good opportunity to revisit internal marketing practices.

Consider:

• Reviewing existing advertisements and social media content for potentially misleading statements.
• Ensuring all performance-related claims are accurate and supported.
• Coordinating with operators or registered entities before launching new campaigns.
• Training marketing teams and influencers on what they can and cannot say.
• Maintaining records showing that promotional materials were reviewed and approved.

Bottom line

The CFTC’s notice does not prohibit affiliates from promoting prediction markets. Instead, it serves as a reminder that the same principles that have long governed financial and commodities advertising apply equally to event contracts.

As the prediction market industry continues to mature—and regulatory scrutiny inevitably increases—affiliates that invest in robust compliance practices will be better positioned to avoid regulatory issues while maintaining productive relationships with operators and regulators alike.

For affiliates, the message is simple: creative marketing is encouraged, but misleading marketing is not.