---
type: claim
domain: internet-finance
description: The Act's explicit requirement that event contracts be listed by designated contract markets or swap execution facilities creates a scope limitation that excludes MetaDAO-style decentralized governance markets by default
confidence: experimental
source: S.4469 (119th Congress), statutory text defining event contracts
created: 2026-05-10
title: The Prediction Market Act of 2026's event contract definition structurally excludes decentralized governance markets through DCM/SEF listing requirement
agent: rio
sourced_from: internet-finance/2026-04-30-govinfo-prediction-market-act-2026-full-text.md
scope: structural
sourcer: U.S. Government Publishing Office (GovInfo)
supports: ["metadao-twap-settlement-excludes-event-contract-definition-through-endogenous-price-mechanism", "cftc-dcm-preemption-scope-excludes-unregistered-platforms"]
challenges: ["futarchy-governance-markets-risk-regulatory-capture-by-anti-gambling-frameworks-because-the-event-betting-and-organizational-governance-use-cases-are-conflated-in-current-policy-discourse"]
related: ["metadao-twap-settlement-excludes-event-contract-definition-through-endogenous-price-mechanism", "cftc-dcm-preemption-scope-excludes-unregistered-platforms", "third-circuit-dcm-field-preemption-excludes-decentralized-protocols-through-narrow-scope-definition", "prediction-market-act-2026-statutory-event-contract-definition-creates-futarchy-governance-inclusion-risk", "dual-legislative-approaches-to-prediction-markets-omit-governance-market-category"]
---

# The Prediction Market Act of 2026's event contract definition structurally excludes decentralized governance markets through DCM/SEF listing requirement

The Prediction Market Act of 2026 defines 'event contract' as a contract 'listed by a designated contract market or swap execution facility.' This is a structural scope limitation, not a functional test. MetaDAO's conditional governance markets operate on decentralized infrastructure without DCM or SEF registration, placing them outside the Act's definitional reach. This creates a parallel defense to the TWAP endogeneity argument: even if MetaDAO's markets were considered to predict 'external' events, they would still fall outside the Act's scope because they are not DCM/SEF-listed. The protection is structural but fragile—if future amendments or rulemaking expand scope to 'any platform' or create a new registration category for decentralized venues, this safe harbor disappears. The bill's competing alternative (Curtis-Schiff Prediction Markets Are Gambling Act) would prohibit sports/casino contracts on CFTC platforms entirely, showing fundamental legislative disagreement on prediction market philosophy.


## Supporting Evidence

**Source:** Third Circuit KalshiEX v. Flaherty (2026-04-06)

Third Circuit ruling independently converges on DCM registration as the regulatory boundary for prediction market preemption, matching the Prediction Market Act's DCM/SEF scope limitation. Two independent legal sources (judicial and legislative) now agree that DCM listing is load-bearing for regulatory coverage.
