CFTC Prediction Markets
Definition
Prediction markets regulated by the Commodity Futures Trading Commission. The CFTC oversees event contracts traded on designated contract markets (DCMs) like Kalshi, providing legal certainty for US-based traders.
Example
Kalshi's CFTC designation means US residents can legally trade event contracts on politics, economics, and climate.
Related terms
No-Action Letter
A letter from a regulatory agency stating it won't take enforcement action against a specific entity. PredictIt operated under a CFTC no-action letter, which provided limited permission with restrictions like $850 position limits.
Legal Sports Betting
Sports betting that is authorized under state or federal law. Since the 2018 PASPA repeal, over 35 US states have legalized sports betting, each with their own regulatory framework.
KYC (Know Your Customer)
Identity verification required by regulated platforms before allowing trading. Involves submitting government ID and proof of address. Required by Kalshi and most US sportsbooks.
Responsible Gambling
Practices and tools designed to prevent gambling harm, including deposit limits, self-exclusion, cool-off periods, and loss limits. Regulated platforms are required to offer these features.
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