US prediction markets are facing renewed regulatory and financial scrutiny, with the Commodity Futures Trading Commission reportedly examining so-called mention markets while Polymarket deals with questions over its banking relationships.
The latest developments come as federal regulators work on a broader framework for event contracts, a sector that has expanded rapidly across politics, sport, finance and entertainment. The CFTC has already proposed updated rules intended to clarify when certain prediction-market contracts can be restricted on public-interest grounds.
Mention markets draw regulatory attention
The CFTC is reviewing mention markets, according to reports published on 13 August. These contracts allow users to trade on whether a particular word, phrase or subject will be mentioned during a speech, broadcast or other public event.
Concern around the products increased after Gabriel Perez, a longtime teleprompter operator for US President Donald Trump, came under investigation over trades linked to presidential speeches.
Perez allegedly placed more than a dozen trades on Kalshi using advance knowledge of what Trump was expected to say. Kalshi’s surveillance systems detected the activity and referred the matter to the CFTC, while more than $90,000 in potential profits was frozen. Perez was subsequently placed on unpaid leave by the White House.
The controversy has highlighted the potential advantage available to people with access to scripts, prepared remarks or other non-public information.
Kalshi has since withdrawn its sports-related mention markets until further notice, although contracts based on political events and corporate earnings calls have remained available. Neither Kalshi nor the CFTC has publicly detailed the scope or possible outcome of the reported review.
CFTC tightens guidance for incentive programmes
Separately, the CFTC issued new guidance on 12 August covering the self-certification of market-making, liquidity, trading and incentive programmes by registered Designated Contract Markets.
The regulator said it had observed an increasing number of filings containing procedural or substantive deficiencies and reminded exchanges that programmes must comply with existing requirements before being introduced.
Incentives can include payments, rebates, credits or other benefits intended to increase participation or trading volume. While the CFTC acknowledged that properly structured programmes can improve liquidity and price discovery, it said exchanges must provide sufficient information for regulatory review and avoid unjustified preferential treatment between market participants.
The intervention forms part of the regulator’s wider effort to establish clearer standards for the rapidly expanding prediction-market industry.
JPMorgan ended Polymarket banking relationship
Polymarket is facing a separate challenge after the Financial Times reported that JPMorgan Chase terminated its banking relationship with the prediction-market company in October 2025 because of regulatory concerns.
The decision came after Polymarket’s earlier confrontation with the CFTC. In January 2022, the regulator ordered the company to pay a $1.4 million penalty after finding that it had operated an unregistered platform for event-based binary options. Polymarket was also required to wind down markets that did not comply with US law.
Polymarket later regained access to the US market under a separate regulated structure. Despite JPMorgan ending the original banking arrangement, the two companies continue to work together in other areas, including the processing of certain customer fund flows, according to Polymarket.
The banking issue emerges as Polymarket seeks to raise more than $1 billion at a valuation of about $20 billion, more than twice the valuation reported during its 2025 fundraising round.
Together, the CFTC’s review of mention markets, tighter guidance for registered exchanges and Polymarket’s banking difficulties underline the regulatory pressures accompanying the rapid growth of prediction markets in the United States.