Executives from major US exchanges called for consistent regulation of prediction markets during the FIA Global Cleared Markets Conference, pointing to investor protection and market integrity during a period of rising participation in event-based trading.
Prediction markets allow participants to trade contracts linked to the outcome of real-world events. These include elections, policy decisions, economic indicators, and sports results.
Supporters say the markets aggregate collective forecasts into prices that indicate the probability of an outcome. Critics argue that the structure resembles gambling and may be vulnerable to manipulation.
Exchange leaders discuss regulatory approach
Adena Friedman, CEO of Nasdaq, said predictable regulatory frameworks support investor protection and market operation.
“Markets thrive when we have consistent regulation, and it allows investors, first of all, to be protected,” Friedman said during the panel discussion.
“We are going to the SEC, because the options markets are governed by the SEC, and we want to make sure that within the confines of the rule base that we operate in, we can create a construct that will work for investors,” he added.
Nasdaq earlier this month sought approval from the US Securities and Exchange Commission to introduce prediction market options tied to a major stock index.
Calls for rules that endure across administrations
Terry Duffy, CEO of CME Group, said prediction markets would benefit from regulatory frameworks that remain consistent across political administrations.
He said the development of the sector requires “solid regulation” that remains in place across multiple governments rather than changing with each administration.
“I think that’s the biggest problem we have, especially with crypto and especially with predictions,” Duffy said.
New event contracts raise market integrity questions
Exchange executives also raised concerns about protecting customers from market manipulation while new types of contracts appear on prediction market platforms.
On Polymarket, contracts include events such as the number of posts billionaire Elon Musk will make on his social media platform in a week and whether the Iranian regime will fall by June 30.
Investment and product launches in the sector
Interest in prediction markets increased during the 2024 US presidential race when traders moved to platforms to place wagers on the outcome. The sector has since drawn billions of dollars in funding from venture investors and financial institutions.
Exchange operators have also taken steps to enter the segment. In October, Intercontinental Exchange, parent company of the New York Stock Exchange, said it would invest up to $2 billion in Polymarket.
CME Group in December launched a prediction markets platform in five US states through a partnership with sports betting firm FanDuel.
Analysts say prediction market products may attract a larger pool of retail traders and increase trading volumes, offering exchanges an additional revenue stream while competition continues in futures and options markets.
Original article: https://www.yogonet.com/international/news/2026/03/11/117998-us-exchange-leaders-call-for-consistent-regulation-of-prediction-markets
