US prediction markets — regulated landscape
CFTC-regulated DCM exchanges, DCO clearinghouses, FCM and IB intermediaries, and the front-end brands routing through them — plus the emerging SEC-regulated securities-based event contracts track. Current as of May 2026.
Exchange and clearinghouse structure: where trading actually happens
Each platform routes through a CFTC-registered Designated Contract Market (DCM). The Derivatives Clearing Organization (DCO) clears the trades. A Futures Commission Merchant (FCM) intermediates customer access (where applicable).
KalshiEX LLC
DCM — designated 2020 · self-clears via affiliate Kalshi Klear (DCO, Aug 2024)
Front-ends routing through KalshiEX:
Crypto.com | Derivatives North America (CDNA)
DCM + DCO (formerly Nadex) · DCM amended Sep 2025 for margined products · full FCM/DCM/DCO stack
Front-ends routing through CDNA:
QCX LLC d/b/a Polymarket US
DCM — designated Jul 2025 · DCO affiliate QC Clearing · acquired by Polymarket for $112M
Front-ends routing through QCX:
Other live DCMs hosting prediction-market contracts
Each is its own DCM; clearing arrangement noted per row
Operating under CFTC no-action letter
Not DCMs — historical exemptions from intermediation/registration requirements
SEC-regulated prediction markets (securities-based event contracts)
Listed on SEC-registered national securities exchanges, not CFTC DCMs · structured as options on securities or securities indices · rely on the CEA § 2(a)(1)(C)(i)(I) swap-securities exclusion to sit outside CFTC jurisdiction · cleared by OCC (dual SEC/CFTC-registered SIFMU)
Why this matters: The prediction-market landscape is bifurcating into two regulatory tracks — CFTC-regulated event contracts (Kalshi, Polymarket, Crypto.com, et al., facing state-gambling-law preemption litigation) and SEC-regulated securities-based event contracts (Cboe, prospectively Nasdaq). The SEC path uses a slower Section 19(b) rule-change process but rests on more settled securities-law preemption.
Pending or announced
Upcoming prediction markets via CFTC DCM designation
Pursuing own DCM / DCO
Front-ends planning to route via existing DCMs
Front-end intermediation status: how customers actually reach the market
Three legal pathways have emerged for prediction-market front-ends: full FCM registration (holds customer funds), IB registration (solicits orders, routes funds to an FCM), or unregistered “technology partner” arrangements (the DCM is the registered party). The IB route is the fastest-growing on-ramp for sports-betting and DFS operators.
Registered FCMs intermediating prediction-market contracts
Hold customer funds, accept orders, route to one or more DCMs · NFA members · subject to CFTC 17 CFR Part 1 rules
Pending FCM applications: DraftKings, FanDuel (standalone New Ventures III entity).
Adjacent in-flight: Coinbase agreed to acquire The Clearing Company in Dec 2025 (CFTC DCO application pending); once approved, Coinbase will hold an FCM plus its own DCO, materially reducing Kalshi-dependence.
Registered Introducing Brokers intermediating prediction-market contracts
Solicit orders and route them through an FCM for execution and clearing on a DCM · do not hold customer funds · NFA members · bound by NFA Compliance Rule 2-29 advertising restrictions
Pending IB applications: DAZN (Sports Marketing 1 LLC, filed Apr 2026, partnered with Polymarket / ADI Predictstreet) · Gains.com (sweepstakes platform).
Pattern: The IB route has emerged as the preferred on-ramp for sports-betting, DFS, and content-brand operators that want to plug into someone else’s DCM without the years-long DCM/DCO build or the higher capital and segregated-funds burden of full FCM status.
Technology partners (no NFA registration)
White-label arrangement — customer is the DCM’s customer; front-end provides only the app/UX layer. No customer funds held by the front-end · no NFA membership · DCM bears all CFTC obligations · not directly bound by NFA Rule 2-29 (though the DCM/FCM that “directly benefits” from the promotion is)
Recently transitioned out of this category: Underdog (now FCM, Jan 2026), DraftKings Predictions (now IB via Gus III LLC, Dec 2025), Fanatics Markets (now IB via Paragon and FCM via Morton St). The unregistered tech-partner pathway is increasingly viewed as transitional — operators serious about scale are moving to FCM or IB registration.
Direct DCM brands (the exchange itself)
Customer-facing app operated by the DCM under its own registration · the brand the customer sees is the same legal entity that holds the DCM license · no intermediary in the stack
Operator-owned DCMs fronted by a separate consumer brand
DCM license owned by an operator that markets to customers under a different brand and routes order flow through a separate FCM or IB entity · the DCM itself has no live consumer-facing app under its own name
The IB vs FCM vs tech-partner choice
FCMs hold customer funds and execute trades; IBs do not hold funds but solicit orders and route them to an FCM that holds the account. Both are NFA members bound by NFA Compliance Rule 2-29’s advertising and promotional-material restrictions. Tech partners hold no funds, take no orders, and are not NFA members — the DCM is the CFTC-overseen party that bears the regulatory obligations. The current regulatory trajectory — DraftKings, Fanatics, and Underdog all upgrading from tech-partner to IB or FCM status within the past year — suggests the tech-partner pathway is now treated as a starter chassis, not a permanent home.