Published on: February 13, 2026, 02:24h.

Updated on: February 13, 2026, 02:24h.

• CFTC and SEC share regulatory responsibilities
• SEC Chair Atkins highlights potential overlaps in prediction market regulation
• SEC unlikely to oversee sports-related contracts

Prediction market operators might soon encounter another federal oversight entity: The Securities and Exchange Commission (SEC).

During a hearing of the Senate Banking Committee, SEC Chairman Paul Atkins noted that the primary regulatory burden for prediction markets lies with the Commodity Futures Trading Commission (CFTC). However, some areas of the industry may come under the SEC’s jurisdiction or that of both organizations.

“Prediction markets represent a scenario where there could be overlapping jurisdiction,” stated Atkins at the hearing. “This is a critical issue we are examining.”

He emphasized the necessity for the CFTC and SEC to work together in how they regulate the rapidly evolving prediction markets sector.

SEC Oversight of Sports Prediction Markets Seems Unlikely

Sports contracts — the main drivers of volume in prediction markets — are unlikely to be under SEC regulation. These derivatives are registered through the CFTC, and yes/no exchange operators undergo self-certification by filing with the CFTC.

Furthermore, CFTC Chair Michael Selig has indicated intentions to revise the rules governing sports derivatives, which some critics argue are just a rebranded form of sports betting.

“Chairman Selig instructed CFTC staff to retract any proposed rules or advisories that might have created confusion or hesitance regarding participation in prediction markets,” remarked Alvarez & Marsal. “The CFTC intends to draft new regulations that will offer clearer guidelines for prediction markets and establish a collaborative interpretation of Title VII with the SEC to clarify product classifications and jurisdiction.”

Potential Areas for SEC’s Involvement in Prediction Markets

While the sports angle draws attention, prediction markets also provide contracts related to numerous other events, including corporate earnings, mergers and acquisitions, and product launches—all of which can influence stock prices and thus may fall under SEC regulation.

Prediction markets also include event contracts related to fluctuations in major equity indices, such as the S&P 500, individual stock prices, and Treasury market activities. The SEC would likely regulate these derivatives.

“A security remains a security, regardless of the format, and details concerning prediction markets will depend upon the specific language used,” explained Atkins during the hearing.

For institutional investors, risk managers, and policymakers, enhanced regulatory clarity could foster increased use of prediction markets among professional investors. Many on Wall Street are hopeful for this development, as they believe reducing prediction markets to merely alternatives for sports betting would be disappointing.