In early 2026, the Commodity Futures Trading Commission released an Advance Notice of Proposed Rulemaking (ANPRM) seeking public comment on how prediction markets — platforms where participants trade contracts tied to the outcome of real-world events — should be regulated under US commodity law.
It is, on the surface, a dry regulatory document. But for anyone building in the halal finance, Islamic decision science, DeFi, or information markets space, it is one of the most consequential regulatory signals of the year.
What the CFTC Is Asking
The ANPRM does not propose specific rules. It asks foundational questions: Are prediction market contracts “event contracts” under the Commodity Exchange Act? Should they be traded on designated contract markets? What consumer protections are needed? How should political event contracts be treated differently from financial event contracts?
These questions matter because they will define whether prediction market platforms need CFTC registration, what their compliance obligations look like, and which structures are legally defensible in the US — and, by extension, in jurisdictions that tend to follow US regulatory precedent.
The Islamic Finance Dimension
One of the most interesting design challenges in the halal finance space is finding Shariah-compliant alternatives to conventional speculation and insurance products. Prediction markets — structured around information aggregation rather than gambling — have been proposed as one such alternative by scholars exploring Islamic approaches to risk and uncertainty.
The CFTC’s framework, when finalised, will have direct implications for any platform seeking to operate in this space with a US nexus, a Gulf client base, or any token structure that could be classified as a commodity.
What Operators Should Be Watching
Any platform that: (a) allows trading on the outcome of real-world events, (b) settles in token, stablecoin, or fiat, and (c) has US users or US-accessible liquidity is within scope of this rulemaking. The question is not whether the CFTC will regulate these platforms — it is what the registration and compliance pathway will look like.
Early-stage platforms should be structuring now for regulatory optionality: entity placement in jurisdictions with clear frameworks (the UAE’s CBUAE and VARA are ahead of the US on event contract classification), legal architecture that separates the market operator from the settlement layer, and KYC/AML programmes built to FATF standard.
The Bottom Line
The CFTC is moving toward clarity on prediction markets. That clarity will benefit well-structured operators and create significant compliance costs for those who have not thought through their legal architecture. The comment period is the window to engage — and the structure decisions made now will determine whether platforms are ahead of or behind the regulatory curve when the rules land.
Esquare Legal advises prediction market operators, halal finance platforms, and DeFi protocols on regulatory structuring across UAE, US, and LATAM jurisdictions. Contact us at admin@esquarelegal.com.