Polymarket submits "Basket Spread Contract" for CFTC certification! SEC Chair Atkins is seeking public comment on the prediction market ETF

The "parlay" gameplay officially lands in the prediction market. Polymarket submitted a self-certification file to the CFTC on Wednesday, planning to launch "combinatorial outcome contracts" for sports event futures in the U.S.—in plain terms, a parlay style of sports betting where all options must hit to profit. Meanwhile, SEC Chair Paul Atkins simultaneously issued a statement, announcing that the agency is seeking public input on new fund products like prediction market ETFs, signaling a new phase in prediction market regulation.
(Background: Polymarket announces return to the U.S.: approved by CFTC to operate as a designated contract market)
(Additional background: Bitwise applies to launch "prediction market ETFs"! Six prediction fund ETFs open for betting on U.S. elections)

Table of Contents

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• Parlay trend: from sports betting to prediction markets
• On the same day, SEC Chair Atkins unveils prediction market ETFs
• Regulatory triangle: CFTC, SEC, and state governments each hold their ground
• Summary: accelerating compliance, the Supreme Court as a key variable

The prediction market giant Polymarket submitted a self-certification file to the U.S. Commodity Futures Trading Commission (CFTC) on Wednesday (the 20th), planning to launch "combinatorial outcome contracts"—in simple terms, a parlay style of sports event contracts.

According to the file submitted by Polymarket to the CFTC, these contracts are essentially packages of two or more underlying contracts, where all options must be correct to receive a full payout of $1; if any one leg misses, the contract resets to zero. The file clearly states: "Each outcome must be satisfied for the contract to settle at $1. If and only if every 'leg' hits, the contract pays out $1. Any single 'leg' missing results in the contract resetting to zero."

This file has been publicly disclosed on the CFTC website. Since Polymarket uses a "self-certification" mechanism, this means the platform is not requesting permission from the CFTC but is instead notifying the regulator of its intention to launch this product. The document indicates that this compliant product is expected to go live no earlier than Thursday, May 21. Notably, Polymarket also submitted another attachment, but it was marked as confidential due to involving trade secrets and proprietary information.

Parlay trend: from sports betting to prediction markets

Parlay has long been a mainstream method in traditional sports betting. For example, in the NBA, a bettor might wager on Team A to win, Team B to cover the spread, and the total points to be over a certain threshold—all three must succeed for a profit; otherwise, they lose everything. Compared to single-game bets, parlays offer higher potential returns but also amplify the risk of failure.

Polymarket has transplanted this concept into prediction markets, allowing users to "stack" multiple contract outcomes within the same platform. For users accustomed to traditional sports betting, this lowers the learning curve, but it also sparks debates among academics and regulators about whether prediction markets are essentially gambling—especially as conflicts over jurisdiction between U.S. state regulators and the federal CFTC over sports prediction markets continue to escalate.

On the same day, SEC Chair Atkins unveils prediction market ETFs

On the same day Polymarket submitted its file, the Securities and Exchange Commission (SEC) Chair Paul Atkins also made a surprising statement about prediction markets. In a declaration, Atkins noted that ETF assets have doubled over the past seven years, significantly improving capital formation efficiency and investor choice, but "new products also bring new issues."

"I appreciate that fund issuers have agreed to delay the effective dates of several new ETF types, including event contract ETFs, so we can evaluate their impact during this period," Atkins said. "To ensure this work proceeds transparently and prudently, I have directed staff to seek public input on how the Commission should respond to recent market developments."

This move is interpreted by the market as SEC's first formal indication of willingness to review the feasibility of prediction market-related ETF products. Previously, Bitwise had submitted six applications for prediction market-themed ETFs, betting on political events like the U.S. elections; CME also partnered with FanDuel to launch FanDuel Predicts, integrating binary event contracts into retail markets.

Regulatory triangle: CFTC, SEC, and state governments each hold their ground

The question of regulation for prediction markets has become a focal point in Washington over the past few months. The CFTC claims these products fall under the Commodity Exchange Act as futures contracts and thus are federally regulated; however, state regulators and gambling operators argue that sports-related prediction markets infringe on states' rights to regulate and tax gambling.

Just this week, the Senate Commerce Committee held a hearing questioning the explosive growth of prediction market platforms. Legal scholars widely expect the Supreme Court will ultimately intervene to clarify the boundaries of federal and state regulatory authority.

Compared to the U.S.'s dual federal/state system, Taiwan's regulation of prediction markets remains relatively gray. Sports lotteries are issued exclusively by Taiwan Sports Lottery Corporation and governed by the Sports Lottery Act; however, blockchain prediction platforms like Polymarket are not yet available in Taiwan. Users participating cross-border lack clear guidance on currency exchange and tax reporting. As global prediction market ETFs approach, whether domestic regulators will follow suit to establish clear oversight of digital prediction markets remains to be seen.

Summary: accelerating compliance, the Supreme Court as a key variable

From Polymarket's self-certification of parlay contracts to SEC Chair Atkins publicly seeking opinions on prediction market ETFs, it shows that Washington's attitude toward prediction markets is shifting from passive suppression to active regulation. However, as long as jurisdictional disputes between CFTC and states remain unresolved and Congress does not pass explicit legislation, the overall regulatory framework will stay fragmented. Whether prediction markets can truly evolve from "cognitive monetization" tools into mainstream financial asset classes will depend on the Supreme Court's stance, which will be the next decisive factor.