The Commodity Futures Trading Commission (CFTC) is urging caution for prediction markets considering listing trading event contracts based on the likelihood of an individual using certain words.
Known as “mention markets,” these contracts involve specific outcomes based on an individual mentioning particular words, attending designated events, or interacting with others in specified ways. The CFTC, the regulatory body for prediction markets, states in a recent advisory that Designated Contract Markets (DCMs) should exercise caution before listing a mention market.
These contract types present a heightened risk of manipulation because their settlement turns on the discrete conduct of a person that may be neither independently generated nor externally verifiable,” the CFTC said.
The advisory provided information but did not impose new obligations on DCMs.
“Entities offering event contracts on their platforms are responsible for ensuring that all listed or traded contracts comply with relevant statutory and regulatory requirements,” explained the CFTC.
Example Involving Santos
Mention markets enable traders to bet on whether a specific individual will use particular words or phrases in public forums like speeches, earnings calls, or on social media. For attendance and interaction-based contracts, traders predict actions such as handshakes, photo opportunities, or specific social media posts involving certain individuals.
The Commodity Exchange Act (CEA) enforced by the CFTC requires listing contracts on DCMs that are not easily manipulated. The CFTC advises prediction markets to consult with the Division of Market Oversight to assess manipulation risks related to proposed mention markets.
In the fall of 2025, President Donald Trump commuted George Santos’ federal prison sentence for campaign finance violations. Leading up to Trump’s State of the Union address, Santos indicated he would attend but later cited travel delays for his absence.
Reportedly, Santos had bet against his attendance by purchasing “no” contracts on prediction markets, allegedly influencing the market through social media posts and making a profit of over $17,500. Santos denied the accusations.
Continued Use of Mention Markets
Mention markets are still prevalent in prediction markets, with traders betting on scenarios like Trump mentioning “Trump Derangement Syndrome,” Domino’s executives saying “parmesan,” or Kroger executives discussing GLP-1’s impact on sales.