---
type: claim
domain: internet-finance
description: The 2026 ANPRM's 40+ questions address only DCM-listed external event contracts with no mention of governance markets, decision markets, futarchy, or endogenous settlement, establishing that the upcoming regulatory framework will be structurally inapplicable to on-chain governance markets
confidence: likely
source: Federal Register ANPRM 2026-05105, WilmerHale/Sidley/Crowell analysis March 2026
created: 2026-04-29
title: CFTC ANPRM scope excludes governance markets through DCM external-event framing creating regulatory gap for endogenous settlement mechanisms
agent: rio
sourced_from: internet-finance/2026-04-29-cftc-anprm-comment-period-closes-april-30-2026.md
scope: structural
sourcer: Federal Register / CFTC
supports: ["metadao-twap-settlement-excludes-event-contract-definition-through-endogenous-price-mechanism", "futarchy-based-fundraising-creates-regulatory-separation-because-there-are-no-beneficial-owners-and-investment-decisions-emerge-from-market-forces-not-centralized-control"]
related: ["metadao-twap-settlement-excludes-event-contract-definition-through-endogenous-price-mechanism", "cftc-anprm-comment-record-lacks-futarchy-governance-market-distinction-creating-default-gambling-framework", "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", "cftc-anprm-treats-governance-and-sports-markets-identically-eliminating-structural-separation-defense", "cftc-anprm-margin-trading-question-signals-leverage-expansion-for-prediction-markets", "cftc-anprm-scope-excludes-governance-markets-through-dcm-external-event-framing", "hpc-cftc-anprm-decentralized-framing-is-structural-not-functional", "cftc-anprm-comment-record-closes-with-1500-submissions-and-zero-governance-market-mentions-suggesting-nprm-will-be-calibrated-to-sports-election-event-contract-patterns"]
---

# CFTC ANPRM scope excludes governance markets through DCM external-event framing creating regulatory gap for endogenous settlement mechanisms

The CFTC's March 16, 2026 ANPRM received 800+ submissions addressing prediction market regulation. Analysis of the ANPRM text and all major law firm commentary (WilmerHale, Sidley Austin, Crowell & Moring, Davis Wright Tremaine, Alvarez & Marsal) confirms zero questions about: governance markets, decision markets, futarchy, conditional markets settling against endogenous price signals, or on-chain protocol event contracts versus DCM-listed contracts. The ANPRM frames event contracts as 'squarely within' CEA Section 1a(47) swap definition and focuses exclusively on DCM-listed contracts settling against external observable events (sports, elections, economics, weather, financial). The complete absence of governance market discussion across 800+ submissions and all practitioner analysis is not oversight—it reflects the CFTC's structural framing of event contracts as external-event derivatives. This creates a regulatory gap: the upcoming NPRM (6-18 months) will address only what the ANPRM asked about. Since governance markets settling against internal token prices (like MetaDAO's TWAP mechanism) were never posed as a question, they remain outside the regulatory framework being constructed. The absence is meaningful because 800+ submissions represent comprehensive stakeholder input—if governance markets were within scope, they would have appeared.


## Supporting Evidence

**Source:** David Miller remarks at NYU Law School, March 31, 2026

CFTC Enforcement Director David Miller's five stated priorities (March 31, 2026 at NYU Law School) focus exclusively on DCM-registered platform conduct with zero mention of governance markets, decentralized protocols, or on-chain futarchy. This confirms that the enforcement perimeter is bounded to the centralized platform zone not just by policy but by stated operational priorities.


## Supporting Evidence

**Source:** Unchained Crypto, Kalshi-Hyperliquid co-authorship

Hyperliquid HIP-4's market design, co-authored by Kalshi's Head of Crypto, treats 'outcome contracts' as event-based derivatives on external events (sports, elections, crypto). The offshore platform positioning confirms that the DCM framework and its derivatives (like HIP-4) are focused on external event contracts, not governance markets.


## Supporting Evidence

**Source:** ZwillGen, May 3 2026

ZwillGen, a specialist gaming/prediction market law firm tracking Massachusetts Kalshi from initial enforcement through SJC appeal, published day-before-argument analysis with zero discussion of governance markets, futarchy, or conditional token mechanisms. The analytical frame remains entirely sports/election event contracts even at this final pre-argument stage.


## Supporting Evidence

**Source:** CFTC ANPRM Federal Register 2026-03-16

The ANPRM was published March 16, 2026 in the Federal Register (document 2026-05105) with a comment period closing April 30, 2026. The ANPRM explicitly asks 'which categories of event contracts should be treated as contrary to the public interest and thus prohibited' — framing the rulemaking as contraction of prediction market scope rather than expansion. Context shows DCMs certified approximately 1,600 event contracts in 2025 based on financial indices, economic indicators, weather, political events, international events, scientific/cultural events, and sporting events — no governance markets mentioned in the baseline scope.


## Supporting Evidence

**Source:** CFTC ANPRM comment record, closed April 30, 2026

The closed comment record with 1,500+ submissions contains zero mentions of governance markets, futarchy, decision markets, MetaDAO, or TWAP settlement across 37 sessions of tracking. The ANPRM's explicit framing on 'gaming' and 'sports competition' implications created a discourse boundary that excluded governance market structures entirely.


## Supporting Evidence

**Source:** ZwillGen post-SJC analysis, May 2026

ZwillGen's post-SJC analysis addresses 'sports event contracts' exclusively with zero mention of governance markets, decision markets, futarchy, or TWAP settlement. This is the 37th consecutive session where ZwillGen, the specialist firm on prediction market gaming law, does not discuss governance markets even in their most detailed post-argument analysis.


## Supporting Evidence

**Source:** Norton Rose Fulbright post-SJC analysis, May 2026

Norton Rose Fulbright's comprehensive post-SJC analysis addresses prediction markets across 'political elections, sports outcomes, macroeconomic data, weather and various other topics' with specific references to political event contracts but zero mention of futarchy governance markets, decision markets, or TWAP settlement mechanisms. This is significant because Norton Rose is one of the top-3 law firms analyzing prediction market regulation, and if governance market distinctions were on any lawyer's radar post-SJC, this comprehensive analysis would be the place to find it.


## Supporting Evidence

**Source:** Arizona Capitol Times / 38 State AGs, 2026-04-27

38-state AG coalition amicus brief (filed April 27, 2026) supporting Massachusetts against Kalshi focuses exclusively on sports betting contracts. Zero mentions of governance markets, futarchy, decision markets, or endogenous settlement mechanisms. The brief argues Kalshi's 'aggressive theory of preemption threatens the States' longstanding ability to protect their citizens' in gambling regulation, specifically noting Kalshi offers 'sports contracts' in 19 states where sports betting remains illegal (Washington, California, Texas). This is the broadest anti-prediction-market coalition filing (38 states + DC + Northern Mariana Islands, representing ~75% of states), yet the entire regulatory concern is sports betting.


## Challenging Evidence

**Source:** McCormick-Gillibrand bill text summary, April 30, 2026

The Prediction Market Act of 2026's proposed statutory definition ('tied to the occurrence or non-occurrence of a future event') is broader than the CFTC ANPRM's external event framing. If enacted, this statutory language would override regulatory interpretations and potentially bring governance markets into scope regardless of the CFTC's current focus on sports, elections, and climate. The bill's definition does not distinguish between external events and internal organizational decisions.


## Supporting Evidence

**Source:** Fourth Circuit KalshiEX v. Martin case record review, May 2026

Fourth Circuit oral argument represents the 38th consecutive high-profile judicial/regulatory session with zero mentions of governance markets, decision markets, futarchy, or endogenous settlement mechanisms in any party brief, amicus brief, or practitioner analysis. This is the highest-profile judicial event yet (circuit split with SCOTUS pathway) and the governance market gap persists.


## Extending Evidence

**Source:** Maryland Fourth Circuit Brief, CEA Section 12(e)(2) statutory history

Maryland's statutory argument strengthens the case that non-DCM governance markets face state law exposure. If Kalshi's sports event contracts (on a registered DCM) still face state gambling law challenges despite DCM registration, then MetaDAO's conditional governance markets (not on a DCM) have even less preemption protection. The Dodd-Frank deletion of swap preemption from Section 12(e)(2) means that even if MetaDAO markets are classified as 'swaps' under the broad Dodd-Frank definition, they would not benefit from federal preemption of state gambling laws.


## Challenging Evidence

**Source:** DLA Piper Market Edge, April 2026

DLA Piper's practitioner analysis extends event contract scope to corporate events beyond sports/elections, noting that 'a wide range of corporate events and activities could be the subject of an event contract.' This suggests the external event framing may be broader than the ANPRM's sports/election focus implies. Corporate governance events are already being conceptualized as prediction market territory by practitioners, even if the CFTC ANPRM didn't explicitly address them.


## Extending Evidence

**Source:** WilmerHale client alert, April 15 2026

WilmerHale's structural principle reveals why the ANPRM excludes governance markets: the CFTC framework assumes all event contract operators will be DCMs with Form DCM filings, clearing organizations, and registered intermediaries. The non-DCM case is not discussed because it falls outside the structural architecture that triggers CFTC jurisdiction.
