---
type: source
title: "WilmerHale: CFTC Prediction Markets ANPRM Analysis — 40 Questions, No Governance Market Coverage"
author: "WilmerHale (law firm client alert)"
url: https://www.wilmerhale.com/en/insights/client-alerts/20260317-cftc-seeks-public-input-on-prediction-markets-regulation
date: 2026-03-17
domain: internet-finance
secondary_domains: []
format: thread
status: processed
priority: medium
tags: [cftc, anprm, prediction-markets, regulation, futarchy, governance-markets, comment-period]
---

## Content

WilmerHale client alert analyzing CFTC's March 12, 2026 Advance Notice of Proposed Rulemaking on prediction markets. Published in Federal Register March 16, 2026 as Document No. 2026-05105.

**Comment deadline:** 45 days from Federal Register publication (March 16) = approximately April 30, 2026.

**Scope of the 40 questions:**
1. DCM core principles applicability to event contracts
2. Public interest considerations associated with event contracts
3. Activities listed under CEA Section 5c(c)(5)(C)
4. Procedural aspects of public interest determinations
5. Insider information risks in event contract marketplaces
6. Contract types and classifications (questions 33-40)

**What the ANPRM does NOT include:**
- No questions about governance/DAO decision markets
- No questions about futarchy or blockchain-based governance prediction markets
- No mention of corporate decision-making applications
- No discussion of decentralized protocols or non-centralized prediction market infrastructure
- Focus is entirely on CFTC-regulated exchanges (DCMs) and sports/entertainment contracts

**Advisory focus:** The accompanying advisory (Advisory Letter 26-08) focuses on sports contract manipulation risks and settlement integrity with sports authorities.

**Settlement integrity concern:** The ANPRM flags "contracts resolving based on the action of a single individual or small group" for heightened scrutiny — this is the sports context (a referee's call, an athlete's performance), not governance markets.

## Agent Notes

**Why this matters:** The CFTC's silence on governance markets is simultaneously an opportunity and a risk. It means futarchy governance markets are not specifically regulated (favorable), but it also means there's no safe harbor from the gaming classification track that states are pursuing (dangerous). The comment window is the only near-term opportunity to proactively define the governance market category before the ANPRM process closes.

**What surprised me:** The complete absence of governance/DAO/futarchy from 40 questions is more striking than expected. Given that prediction markets are being used for corporate governance at scale (MetaDAO, $57M+ under governance), the CFTC's focus on sports/entertainment suggests regulators haven't mapped the governance application yet. This is an information gap the ecosystem could fill through comments.

**What I expected but didn't find:** Any question about the distinction between entertainment prediction markets and governance/corporate decision markets. The WilmerHale analysis doesn't even mention this distinction — it's focused purely on the DCM framework for sports/events.

**KB connections:**
- [[futarchy-governed entities are structurally not securities because prediction market participation replaces the concentrated promoter effort that the Howey test requires]] — the ANPRM silence on governance markets means the futarchy regulatory argument rests entirely on the securities analysis; the gaming classification vector is not addressed in the ANPRM
- The "hedging function test" from Session 3 (Better Markets argument) — this is exactly what comments should argue: governance markets have legitimate hedging function (token holders hedge their economic exposure through governance) that sports prediction markets lack
- "Decentralized governance markets face worse legal treatment than centralized prediction markets under current preemption analysis" (Session 3 claim candidate) — the ANPRM's DCM focus only compounds this: decentralized protocols aren't DCMs, so they're not even being considered in the CFTC's framework

**Extraction hints:**
- Claim candidate: "The CFTC's March 2026 ANPRM on prediction markets contains no questions about governance/DAO decision markets, leaving futarchy governance in an unaddressed regulatory gap that neither enables nor restricts the mechanism"
- This is primarily an enrichment/complication for the regulatory defensibility claims rather than a standalone claim

**Context:** WilmerHale is a major regulatory law firm frequently cited on crypto regulation. Their analysis reflects what legal practitioners are advising institutional clients on. The absence of governance market discussion in their analysis suggests the industry is not yet treating the governance market regulatory question as live.

## Curator Notes

PRIMARY CONNECTION: [[futarchy-governed entities are structurally not securities because prediction market participation replaces the concentrated promoter effort that the Howey test requires]]
WHY ARCHIVED: Confirms the regulatory gap: CFTC ANPRM does not address governance markets, meaning the comment window is open for ecosystem players to proactively define the category
EXTRACTION HINT: The evidence here is negative (absence of governance market coverage) rather than positive. The claim should be framed around the regulatory gap and the comment opportunity, not around what the ANPRM covers.
